South Korea's CJ CGV to sell stake in Vietnamese subsidiary

South Korea's largest multiplex cinema chain said it plans to sell the stake in CJ Vietnam for around 32.4 billion KRW ($26.84 million), equivalent to 5.4 percent of its charter capital, on July 3, according to Business Korea.

A CJ CGV rep told VnExpress Thursday that the deal will take place internally among companies of the parent CJ Group, a conglomerate holding company operating in foods, services, technology, logistics and media.

The 25 percent stake in CJ Vietnam is expected to be transferred to CJ Logistics, the representative said.

CJ Vietnam owns and constructs office buildings of the CJ Group in Vietnam. The real estate investment unit is jointly owned by CJ Group itself and two of its subsidiaries, CJ E&M (entertainment and mass media) and CJ Korea Express (international freight), each holding a 25 percent stake.

The Business Korea report said CJ CGV’s structure has weakened significantly after the Covid-19 epidemic, with its debt to equity ratio soaring by nearly 200 percentage points to 845 percent in the first quarter of 2020.

Its total investment capital has fallen by 22 percent year-on-year as of the end of the first quarter. Revenue halved in this period, and net losses rose to 118.6 billion KRW ($98.28 million), from 85.7 billion KRW ($71.03 million) the same period last year.

CJ CGV entered Vietnam in 2011 when it acquired local cinema chain Megastar Media Company, which had seven multiplexes sporting a total of 54 screens.