Lotte Group is poised to sell its financing unit Lotte Capital and discuss the matter in the respective board of directors meetings of its shareholding Lotte subsidiaries this week, according to a news report Monday.
Lotte Capital is a privately held finance service provider dedicated to installment financing and facility leasing. Nearly 90 percent of shares are owned by Lotte subsidiaries and affiliates. Hotel Lotte owns 39.37 percent of stocks, Lotte Corporation has 25.64 percent, Lotte Engineering and Construction has 11.81 percent and Hotel Lotte Pusan holds 11.47 percent ownership.
Lotte Capital’s net assets stood at 1.2 trillion won ($1.06 billion), generating 123.1 billion won operating profit in the first three quarters this year, according to a disclosure as of end-September. Its acquisition price is reportedly valued at between 900 billion won and 1 trillion won.
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Lotte Group Chairman Shin Dong-bin (Lotte Group) |
This comes in line with a move by Korea’s fifth-largest conglomerate to abide by a law that prohibits large business groups’ ownership of financial arms. In November, Korean holding company Lotte Corporation announced plans to sell other financial units Lotte Card and Lotte Non-Life Insurance.
Under the Monopoly Regulation and Fair Trade Act in Korea, a large business group’s holding company and subsidiaries must sell off their shares of financial arms within two years of introducing holding company structure.
In the case of Lotte Group, shares of such companies must be sold off before October 2019, as Lotte Corporation was founded in October 2017.
By Son Ji-hyoung
(
consnow@heraldcorp.com)
