Hotel Lotte’s KOSPI listing is expected to be delayed as it is still struggling to recover from falling duty-free sales as well as the ongoing corruption probe into Lotte Group, according to news reports on Nov. 28.
“Hotel Lotte’s KOSPI listing will not happen this year,” an executive was quoted as saying by Maeil Business News. “Uncertainties are growing even for next year.”
The hotel chain’s Korean listing is considered crucial for Chairman Shin Dong-bin to strengthen his influence over the retail giant after a bitter ownership feud with his elder brother Shin Dong-joo.
Currently, Japan-based Lotte Holdings owns almost the entire stake in Hotel Lotte, which sits at the top of the group’s Korean operations as the parent firm. The holding firm is 50 percent owned by Japanese packaging firm Kojunsha whose largest shareholder is Shin Dong-joo.
Industry watchers say the return of Chinese visitors will decide the firm’s listing timing. After Lotte provided one of its golf courses as a site for the THAAD deployment, its duty-free sales that make up almost 85 percent of its total revenue were hit hard by the Chinese government’s retaliatory actions. In the second quarter this year, the firm posted an operating loss of 29.8 billion won (US$27.40 million).
Adding to the concerns is the ongoing investigation into Chairman Shin and other owner family members over bribery and embezzlement charges. A Seoul court plans to deliver its ruling on Dec. 22.
By Song Seung-hyun (firstname.lastname@example.org