Cash-strapped E-Land Group announced April 11 that it would spin off its food and dining unit from its subsidiary E-Land Park.

E-Land Park has two different business units — hotels and dining. The South Korean company’s dining unit currently operates 16 restaurant brands, including buffet restaurant Ashley and Nature Kitchen, with over 500 outlets here.

E-Land Park will decide specific schedule for the spin off during its shareholders meeting on April 23.

“After finishing the process of spin off, we are hoping to raise around 100 billion won ($ 87.67 million) through diverse measures, including issuing permanent exchangeable bonds or convertible bonds,” a E-land official said in a statement.

The company aims to first pay back its debt after securing new funds and then use the remaining money to expand its business further.

The group has been making all-out efforts to improve its financial stability before turning into a holding firm management structure. Its debt-to-equity ratio in the third quarter in 2018 dropped to 175.7 percent from over 400 percent in 2013.

Moreover, under the current structure, industry sources see that it is difficult for the restaurant operator to become profitable enough to finance its other divisions. The dining unit’s profits had so far been used to compensate for E-Land Park’s money-losing businesses.

Last year, E-land Park turned to black posting around 3.6 billion won in profit due the improved performance of its dining unit, which posted around 8 billion won profit. E-Land Park’s sales last year reached 475.9 billion won and the sales of its restaurant operating unit accounts for around 82.7 percent of that.

By Song Seung-hyun (ssh@heraldcorp.com)