CJ CGV to Sell Off Stake in Vietnamese Property Investment Subsidiary

CJ CGV will dispose of its stake in a Vietnamese real estate investment subsidiary to improve its financial structure, which has weakened in the wake of the new coronavirus crisis.

CJ CGV announced on June 8 that it will dispose of its 25 percent stake in CJ Vietnam Co., a local real estate investment company, for 32.4 billion won. It is 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, and CJ E&M, CJ, and CJ Korea Express each own 25 percent of the company.

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 increased from 85.7 billion won to 118.6 billion won. Losses in overseas businesses such as Vietnam and Turkey are also expanding.