Korea's fifth-largest conglomerate has been trying to create a holding company structure for the past few years, with Lotte Corp. at the top holding majority stakes in shopping, chemical, construction and other subsidiaries. Then, Chairman Shin, who has a 10.5 percent stake in Lotte Corp., will control all the group's units.
Taking public Hotel Lotte, which Lotte Holdings in Japan currently controls, has been the key to completing the holding company structure in Korea because it reduces Lotte Holdings' stake in the nation's largest hotel chain.
After the shares of Hotel Lotte are floated on the local bourse, the group reportedly plans to combine it with Lotte Corp. to create a new holding firm.
To jumpstart the largely stalled process to take Hotel Lotte public, Lotte Corp. on Oct. 10 decided to acquire a 23.24 percent stake in Lotte Chemical from two affiliates of Lotte Property and Development (11.27 percent) and Hotel Lotte (11.98 percent) in separate block deals.
The deals were worth 2.23 trillion won ($1.96 billion).
Under the deal, the holding firm said its stake investment in Lotte Chemical will help diversify its business portfolio, which currently
focuses on retail, food and beverages.
The deals came just five days after Shin was freed from detention as an appellate court suspended his sentence of corruption charges. He had been in jail since February for involvement in a corruption scandal of the impeached former President Park Geun-hye.
Upon his release, Shin said: "I will make enhanced efforts on the improvement of the group's ownership structure, which has been delayed so far."
Over the move, analysts said Lotte will increase momentum in addressing remaining tasks for ownership restructuring, such as embracing Lotte Chemical into the holding firm structure and the IPO of Hotel Lotte.
Persian
