Hankyung Research "Shinsegae Group Affiliate Separation, Limited Impact on Affiliate Credit Ratings"

Korea Ratings assessed on the 30th that the separation of affiliates within Shinsegae Group will have a limited impact on the credit ratings of major affiliates in the short term. On the same day, Shinsegae Group officially announced the separation of affiliates between Emart and Shinsegae Department Store.

Korea Ratings explained, "As of October 2024, two companies within Shinsegae Group?Shinsegae DF and Shinsegae Construction?have been assigned final credit ratings one notch higher than their standalone creditworthiness due to the possibility of affiliate support in emergencies."

Specifically, it anticipated, "Shinsegae DF is subject to affiliate support possibility with its wholly owning parent company Shinsegae as the support entity, so the affiliate support possibility is expected to be maintained even after the separation of affiliates."

Korea Ratings also projected, "In the case of Shinsegae Construction, the entire group acts as the support entity for affiliate support possibility. Even if the support entity changes to the parent company Emart, considering the level of willingness to provide support and the credit rating gap with the support entity, the application of affiliate support possibility is expected to be maintained."

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