South Korean-Japanese conglomerate Lotte’s Seoul-based holding firm Lotte Corp. sold off its 2.76 percent stake in BNK Financial Group to Hotel Lotte Pusan, BNK said in a regulatory filing on Sept. 3.
Some 9 million shares of BNK Financial were handed over to Hotel Lotte Pusan in return for 60.3 billion won ($49.6 million) cash in after-hours trading Aug. 30.
The combined stock holdings of eight Lotte entities in BNK Financial Group remained intact at 11.14 percent. These included Lotte Shopping, Lotte Chilsung Beverage, Lotte Foundation and Hotel Lotte.
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BNK said in a disclosure that the transaction was meant to increase synergy.
In the meantime, the move is intended to steer clear of legal issues following the introduction of Lotte’s holding company structure in Korea. Under Korean regulations, Korean holding companies must offload ownership in any financial subsidiaries within two years of adopting the holding company structure.
For Lotte, a conglomerate that runs two holding firms -- Lotte Corp. in Korea and Lotte Holdings in Japan -- transferring BNK Financial stocks to Lotte Hotel Pusan could be a way to legitimately hold sway over the group, as nearly 100 percent of Lotte Hotel Pusan is owned by Japanese entities including Lotte Holdings.
Lotte Corp. was established as a holding firm in October 2017. Also up for sale were Lotte’s financial arms in Korea such as Lotte Card and Lotte Non-Life Insurance.
BNK Financial Group is a Busan-based provincial financial holding company. Its subsidiaries include commercial banks, a securities brokerage house, a savings bank, an asset management firm and a credit bureau.
By Son Ji-hyoung (email@example.com)