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South Korea Lotte Group to combine units into holding company: Money Today
April 21, 2017 / 2:58 AM / 7 months ago

South Korea Lotte Group to combine units into holding company: Money Today

SEOUL (Reuters) - South Korea’s Lotte Group plans to combine parts of four units including flagship retailer Lotte Shopping Co Ltd (023530.KS) into a holding company to resolve cross-shareholding issues, online website Money Today reported.

A man carryng his shopping bags rides on an escalator at a Lotte duty free shop in Seoul, South Korea, December 13, 2016. Picture taken December 13, 2016. REUTERS/Kim Hong-Ji

The boards of Lotte Shopping, Lotte Confectionery (004990.KS), Lotte Chilsung Beverage (005300.KS), and Lotte Food (002270.KS) will convene as early as next week to discuss the issue, the domestic business website reported, citing unidentified sources.

The move may take the form of splitting the four firms into two companies each, after which four out of the resulting eight firms will be combined into one holding company, Money Today reported.

An ugly public feud between founding family members starting in 2015 turned the spotlight on the group’s opaque governance structure, increasing pressure on it to resolve its complex network of cross-shareholdings.

Lotte Group said in January that the four units were looking at ways that a holding company structure could be utilized.

The news comes as Lotte Group Chairman Shin Dong-bin was charged earlier this week with bribery in the graft scandal that ousted former president Park Geun-hye, and is also on trial on charges of embezzlement and breach of trust on a separate case.

Lotte Group has resolved 83 percent of cross-shareholding ties between its units since late 2015 and wants to resolve 67 remaining cross shareholdings, a spokesman said. Asked about the Money Today report, he declined to comment.

Shares in Lotte Shopping rose 3.8 percent while Lotte Confectionery climbed 4.1 percent in morning trade. Lotte Chilsung was up 4.6 percent and Lotte Food gained 2.5 percent.

Reporting by Joyce Lee; Editing by Edwina Gibbs

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