April 20, 2024

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[THE INVESTOR] Korean retail giant Lotte Group announced on Aug. 31 that it will inject US$300 million to revive the sluggish operations of its discount supermarket chain in China.

Lotte Shopping Holdings Hong Kong, the holding firm that owns Lotte Mart China and Lotte Department Store China, will take a loan for this purpose.

The new funding comes after Lotte injected 360 million won (US$319.26 million) in March amid the Chinese government’s escalating economic retaliation against Korean firms over the deployment of THAAD missile system.

The Korean firm plans to use US$90 million for Lotte Mart outlets, including wages, while the remaining US$210 million will be used for repaying loans that are due shortly.

Currently, 87 of the total 112 Lotte Mart outlets in China have been forced to suspend operations due to hygiene issues. During the business suspension, however, the firm is required to pay up to 70 percent of employee salaries under the local labor laws.

“With the additional funding, we will be able to maintain the Lotte Mart operations possibly until the end of this year,” an official said.

By Song Seung-hyun (ssh@heraldcorp.com)