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South Korean food giant CJ CheilJedang Corp. will be paying off 1.43 trillion won ($1.2 billion) of debt maturing at the end of December through proceeds from property and other asset sales, reducing its net debt ratio to below 100 percent and improving its balance sheet following last year’s multibillion-dollar buyout of Schwan’s Co.

The company said Tuesday it will be able to secure 1.13 trillion won from offloading properties and liquidizing fixed assets, and 300 billion won from issuing redeemable convertible preference shares at its overseas units.

CJ CheilJedang shares closed Wednesday 0.59 percent lower at 252,000 won, after a gain of 5.85 percent previous day.

In March 2018, CJ CheilJedang struck its biggest-ever buyout deal of U.S. frozen foods company Schwan’s for $1.84 billion. Debt ratio shot up to 182 percent in the third quarter from 167 percent late last year. Net debt ratio also rose 6 percentage points to 99 percent over the same period. Income expenses in the July-September period amounted to 84.3 billion won, up 25.3 billion won from a year earlier.

To improve its bottom line, the company decided to sell 850 billion won worth of land and buildings in Gayang-dong, Seoul to trust company KYH next week. One of the buildings at its training center CJ HumanVille would also be divested to affiliate CJ ENM for 52.8 billion won later this month.

As part of efforts to bolster liquidity, it sold its plant in Guro-gu, Seoul to trust firm YDPP for 230 billion won and entered into a long-term lease agreement.

As of the third quarter, the company had a net debt of 9.48 trillion won, with a net debt-to-equity ratio of 105 percent. After servicing its debt from the planned proceeds, its net debt is projected to fall to 8 trillion won and net debt-to-equity ratio trimmed to below 100 percent. Net debt to earnings before interest, taxes, depreciation and amortization (EBITDA) would slip below 5, down from 5.3 in the previous three months and on par with last year’s 4.9 before the acquisition of Schwan’s.

Its debt-to-total asset ratio, which was 182 percent in late September with a debt load of 16.5 trillion won, is also estimated to drop to 160 percent by the year-end.

The company is expected to save at least 30 billion won in annual interest expenses, which would aid its bottom line, market analysts said.

CJ CheilJedang went on to mend its financial sheet after Korea Ratings in June held the company’s credit rating at AA but revised down its outlook from stable to negative.

The company recently revealed plans to slow its M&A drive to focus more on improving profitability and cash flow.

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