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Hotel Lotte gets preliminary approval for IPO

All News 12:15 January 28, 2016

SEOUL, Jan. 28 (Yonhap) -- South Korean retail giant Lotte Group's hotel unit has passed a preliminary review for listing on the Seoul bourse, the bourse operator said Thursday, paving the way for it to go public around May.

Hotel Lotte has been pushing for an initial public offering (IPO) in a move to improve its transparency following a succession feud, and submitted its application late last month.

"The committee for the preliminary review found Hotel Lotte eligible for listing on the benchmark Korea Composite Stock Price Index (KOSPI)," the Korea Exchange (KRX) said in a release.

The bourse operator added that it has decided to view Lotte Holdings as the de facto entity that controls the hotel chain, and to exempt the hotel chain's shares owned by Kojyunsya, a Japan-based packaging company, from the safeguard deposit.

Japan-based Lotte Holdings is the largest shareholder of Hotel Lotte with a 19.1 percent stake, and Kojyunsya, which is not public, has a 28.1 percent stake in Lotte Holdings.

As of the end of September last year, Hotel Lotte logged 4.14 trillion won (US$3.42 billion) in sales and a net 95.4 billion won in profits.

Factoring in the time needed for due processes to the IPO, such as the demand assessment and pre-order process, the market debut could take place in around May, according to KRX officials.

The listing of Hotel Lotte is one of the reform pledges that Lotte Group Chairman Shin Dong-bin has made as part of efforts to improve the corporate image after a bitter family feud for control of the retail-focused conglomerate, which has sprawling businesses both in South Korea and Japan.

graceoh@yna.co.kr
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