CJ Foodville Co., the food service unit under South Korean conglomerate CJ Group, has decided to hand over its factory in Jincheon, North Chungcheong Province to its sibling CJ CheilJedang Corp. for 20.74 billion won ($17.6 million) as part of its restructuring efforts.
The property and the business right will be handed over to CJ CheilJedang on Nov. 30, according to its disclosure on Monday.
The sale is to improve its business portfolio for management efficiency, CJ Foodville said, adding that it plans to use the proceeds to expand its restaurant business.
Using the acquired factory, CJ CheilJedang will expand home meal replacement (HMR) lineup and boost its business competitiveness, it said.
The latest move is one of CJ Foodville’s rigorous restructuring efforts to improve its bottom line devastated by slow sales. It sold its 45 percent stake in coffee shop chain A Twosome Place to Hong Kong’s private equity firm Anchor Equity Partners last year. It now is seeking to sell off its bakery label Tous Les Jours, the country’s No.2 bakery chain following SPC Group’s Paris Baguette.
CJ Corp., the holding company of CJ Group, however, said it is exploring various ways to enhance the corporate competitiveness but nothing has been decided yet about the reported sale of the bakery business.
CJ shares were trading 0.12 percent lower at 82,100 won in Seoul at 11:14 a.m. Tuesday, and CJ CheilJedang 0.38 percent down at 390,500 won.
By Lee Ha-yeon
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