Lotte Group Chairman Shin Dong-bin said Monday that the upcoming listing of its affiliate, Hotel Lotte, will be a crucial initial step to boost the group's corporate governance, hoping to restore the retail giant's image tainted by a prolonged succession feud.
Shin made the remark in a meeting with institutional investors as Lotte's hotel and duty-free operating unit is set to make its debut in the KOSPI market on June 29.
The listing is one of the reform pledges that the 51-year-old made as part of efforts to improve his corporate image following a bitter succession feud with his elder brother for control of the retail-focused conglomerate, which has sprawling businesses both in South Korea and Japan.
"We will improve the corporate governance and transparency of the Lotte Group through the IPO to make it a more trustworthy company," Shin said in a meeting with investors in Hotel Lotte in downtown Seoul. "We plan to adopt an open management system to put a larger priority on transparent management, social responsibility and corporate governance."
The chairman's rare appearance in the IR meeting showed his willingness to boost the company's corporate image as the drawn-out family feud has virtually come to an end after the founder's second son and incumbent chief won shareholder support to tighten his grip on the business empire.
Starting next month Hotel Lotte plans to hold a series of deal roadshows in major cities including New York, London, Singapore and Hong Kong, according to company officials.
The offering is estimated to be between 4.6 trillion ($3.8 billion) and 5.7 trillion won, and its medium price range will surpass the record IPO amount of a 4.9 trillion sale by Samsung Life Insurance Co. in 2010.
Sales of 47.85 million shares of Hotel Lotte is expected to reduce Japanese shareholdings from 98 percent to 65 percent, which would put the company under stricter scrutiny by local investors.
Hotel Lotte, the world's No. 3 duty-free operator, said it will use the funds to step up its duty-free business, hotel chain and theme park to offer comprehensive options to travelers. The duty-free business is the company's key source of income, accounting for 86 percent of its total sales. (Yonhap)
