S.Korea's Lotte Group to create holding firm to improve governance (updated)

Lotte

26/04/2017 09:18

* Lotte says holding company setup to improve governance 
    * Reorganisation will reduce cross shareholding ties to 18 
from 67 
 
 (Adds decrease in cross-shareholding ties, context) 
    SEOUL, April 26 (Reuters) - South Korea's Lotte Group said 
on Wednesday it is creating a holding company by merging parts 
of four listed units to improve governance and operational 
transparency.  
    Retailer flagship Lotte Shopping  023530.KS , Lotte 
Confectionery  004990.KS , Lotte Chilsung Beverage  005300.KS  
and Lotte Food  002270.KS  will each split into two companies, 
and half of the resulting eight firms will then be combined into 
one holding company, the firms said in filings. 
    Lotte Group said in January the four units were looking at 
ways that a holding company structure could be utilised to 
reduce cross-shareholding ties.  urn:newsml:reuters.com:*:nL3N1HT059 
    The setup of the holding company will reduce 
cross-sharehlding ties to 18 from 67 currently, Lotte Group said 
in a statement.  
    Trading in the units' shares was suspended in tandem with 
the announcement on Wednesday. Trading will resume on Thursday 
morning. 
    Shares of the new entities will begin trading Oct. 30 after 
shareholder approval, Lotte Group said.  
    An ugly public feud between founding family members that 
began in 2015 had increased pressure on Lotte Group to resolve 
its complex governance structure.   
    Lotte had pursued a $4.5 billion initial public offering of 
Hotel Lotte last year as part of its plan to resolve 
cross-shareholdings before it was scuppered.  urn:newsml:reuters.com:*:nL4N195138 
    Lotte Group maintains it will revive the IPO but has not set 
a concrete date.  urn:newsml:reuters.com:*:nL4N195138  
 
 (Reporting by Joyce Lee; Editing by Randy Fabi) 
 ((jungyoon.lee@thomsonreuters.com; +82 2 3704 5609; Reuters 
Messaging: jungyoon.lee.thomsonreuters.com@reuters.net)) 
 
Keywords: LOTTE GROUP RESTRUCTURING/