Private equity firm Tcha Partners Asset Management is launching a project fund to invest 60 billion won ($50.6 million) in E-Land Eats Co Ltd, industry sources said on August 20.

The move comes after another private equity firm, SG Private Equity (SG PE), decided to withdraw its investment from the restaurant chain operator.

E-Land Eats was spun off from E-Land Park, one of the affiliates of South Korean retail giant E-Land Group, in August 2019 with the intention to go public on the local stock exchange by 2023. In the same year, it raised 100 billion won from SG PE in a deal that provided a put option for the private equity firm.

The Covid-19 pandemic has hit the company hard. In the first half of this year, earnings before interest, tax, depreciation and amortization fell below the threshold of 22 billion won, which triggered the put option. E-Land Eats will likely use the proceeds from Tcha Partners to pay SG PE the principal and guaranteed returns.

Tcha Partners was reportedly attracted by terms suggested by E-Land Eats that guarantee a certain return and was also optimistic about the company’s growth potential in the home meal replacement (HMR) market. E-Land Eats operates 16 restaurant brands including buffet chain Ashley and pizza chain Pizza Mall. (Reporting by Se-hun Jo)