Hotel Lotte set to submit IPO application next week

Hotel Lotte plans to submit the application to the Korea Exchange (KRX) on Monday for a preliminary regulatory review of its initial public offering (IPO), after clearing uncertainties surrounding the conglomerate’s management and other issues.

The listing of Hotel Lotte is one of the reform pledges that Lotte Group Chairman Shin Dong-bin has made to assuage public disgust over a bitter family feud for control of the retail-focused conglomerate, which has sprawling businesses both in South Korea and Japan.

Earlier this month, Lotte said its Japanese shareholders support the current leadership despite the ongoing succession feud. Japan-based Lotte Holdings is the largest shareholder of Hotel Lotte with a 19.1 percent stake.

The KRX earlier said it is considering simplifying the screening process to facilitate its listing, using a “fast-track” system that cuts the review period to about a month.

To take advantage of the speedy process, applicants should have over 400 billion won in equity capital and 700 billion won of annual sales for three years, along with other requirements.

“If Hotel Lotte submits the application, we would be able to confirm the result by January,” a KRX official said, asking for anonymity.

Hotel Lotte is pushing for the IPO despite the group losing one of its two duty-free stores in Seoul last month.

Lotte kept a location in Myeongdong, a popular shopping district in downtown, but lost the operational license for another at Lotte World Tower in southeastern Seoul.

The conglomerate earlier said Hotel Lotte is expected to have a market capitalization of around 10 trillion won ($8.6 billion) when it is publicly traded, but market watchers say losing one of its duty-free stores in Seoul in the recent competition could lead to that re-evaluation of its market value.