[Edaily KYUNG GYEYOUNG Reporter] Lotte Group is gaining further momentum in its business restructuring after receiving approval from the Fair Trade Commission (FTC) for the sale of its stake in LOTTE rental. Having secured approximately 1.7 trillion won through the successive sale of non-core businesses and idle assets, Lotte Group plans to accelerate its restructuring efforts.

The Fair Trade Commission announced on the 1st that it had notified Lotte Group of its approval for the acquisition of LOTTE rental shares by Lexicon Korea Holdco, a subsidiary of Texas Pacific Group (TPG), a U.S.-based global private equity fund (PEF).

Previously, on the 11th of last month, Lotte signed a sale agreement for the 61.2% controlling stake in LOTTE rental held by Lotte Hotel and Busan Lotte Hotel. The total transaction value is 1.3105 trillion won, based on a price of 59,000 won per share. Lotte plans to finalize the transaction next month following subsequent procedures, such as a shareholders’ meeting.

The funds raised will be invested in renovating the domestic hubs of Hotel Lotte and Busan Lotte Hotel and strengthening their capabilities in operating premium brands. As the burden of borrowing to support affiliates has been alleviated, financing costs will decrease and investment capacity will expand.

Currently, Lotte Group is rapidly restructuring its portfolio by streamlining non-core businesses and optimizing assets, securing approximately 1.73 trillion won this year alone. In addition to this sale of LOTTE rental, the group has sold: △ a 90% stake in Lotte Eco Wall, a subsidiary of LOTTE ENERGY MATERIALS CORPORATION, for 170.8 billion won in May; △ the Bundang Logistics Center of LOTTE SHOPPING CO., LTD. and LOTTE WELLFOOD for 131.1 billion won; △ the Lotte Mart Kintex branch for 82 billion won; and △ the site of the Lotte Nestlé Korea Cheongju plant for 34.7 billion won.

LOTTE CHEMICAL CORPORATION(011170) The company is, once again, focusing on strengthening its mid- to long-term competitiveness through business restructuring. The Daesan Plant completed its spin-off process last June and, on this day, launched the integrated entity H&L Advanced, formed through a merger with HD HYUNDAI Chemical. This marks the first instance in the petrochemical industry where a business restructuring initiative promoted by the government has led to a corporate merger. The Yeosu Plant also received approval for its business restructuring plan last July and is currently in discussions with affiliated companies to establish an integrated operating system.

In the first half of the year, profitability improved as major affiliates—including LOTTE SHOPPING CO., LTD.(023530), Hotel Lotte, and LOTTE WELLFOOD(280360) —saw a rebound in their performance. A Lotte Group official stated, “Along with the improved first-half performance of major affiliates, we expect the Group’s profitability and financial soundness to increase significantly following the approval of the sale of LOTTE rental,” adding, “We plan to accelerate restructuring in the second half through the sale of non-core businesses and idle assets.”