The E-Land Group clarified its position to take legal action against Korea Investors Service over the credit rating agency’s downgrade of the group’s rating. The group emphasized that it was unreasonable to downgrade the group’s rating despite the fact that it was improving its financial structure through a self-help plan.
"The sell-off of Teenie Weenie and real estate has been smoothly completed and the public subscription of REITs and an IPO of E-Land Retail are being pushed ahead with in earnest. Under these circumstances, we cannot accept this downgrade,” the E-Land Group said on January 1.
Korea Investors Service lowered the credit rating of E-Land World’s unsecured corporate bonds from BBB (negative) to BBB- (negative) on December 30. The credit rating agency explained that the results of the group’s implementation of its self-rescue plan were uncertain as its fashion division recorded sluggish sales, it was difficult for the group to general free cash and the overall group had a big financial burden.
Prior to this, in September of 2016, Korea Investors Service said that it will lower the E-Land Group’s credit rating if the earnings of its main subsidiaries such as its fashion companies in China continue to remain changeable, an IPO of E-Land Retail and the sell-off of the group’s real estate do not proceed smoothly and its EBITDA is more than seven times its net borrowings on a consolidated basis.