The South Korean conglomerate CJ Group’s cinema chain CJ CGV will sell off stake in its real estate investment arm in Vietnam to improve its finance structure, which has weakened in the wake of the novel coronavirus disease (COVID-19) pandemic, the English-language Business Korea newspaper reported.
According to Business Korea, CJ CGV announced on Monday that it will dispose of its 25 percent stake in the local real estate investment company CJ Vietnam Co. for 32.4 billion won (US$27.1 million), equivalent to 5.4 percent of its equity capital.
The scheduled date for its sell-off is July 3.
CJ Vietnam Co. is building CJ Group’s Vietnamese office buildings.
CJ E&M, CJ, and CJ Korea Express each owns 25 percent of the company.
Business Korea said that CJ CGV's financial structure has significantly weakened in the aftermath of the COVID-19 crisis.
Its debt-to-equity ratio soared by nearly 200 percentage points in three months to 845 percent in the first quarter, with its total capital falling 22 percent during the same period.
Compared to a year ago, sales were halved and net loss in the January-March period increased from 85.7 billion won ($71.7 million) to 118.6 billion won ($99.3 million).
Losses in overseas businesses such as Vietnam and Turkey are also expanding.
CJ CGV entered the Vietnam exhibition market in 2011 when it acquired local cinema chain Megastar Media Company with 54 screens in seven locations.