Lotte Sells to Lotte Rental Affinity

Main Contract to Be Signed on March 11
"We Will Strengthen the Fundamental Competitiveness of the Hotels"

Lotte has completed the sale contract of Lotte Rental with the Hong Kong-based private equity fund 'Affinity Equity Partners (Affinity)'.

Lotte announced on the 28th that it will sell Lotte Rental to Affinity on the 11th of next month. The sale price of Lotte Rental is 2.8 trillion KRW based on 100%, and the transaction target is 56.2% of Lotte Rental shares held by Hotel Lotte and Busan Lotte Hotel. The sale amount is 1.6 trillion KRW. Lotte and Affinity went through a due diligence process for about two months after signing a binding memorandum of understanding (binding MOU) in December last year.

At the same time as signing the main contract, Lotte Rental will proceed with a third-party allotment capital increase worth 212 billion KRW. This will be targeted at Karina Transportation Group, a special purpose company (SPC) in which Affinity is a major investor. The funds raised through the capital increase will be used to improve the financial structure following the change of the major shareholder. It will also be used to secure facility funds for the new used car B2C (Business to Consumer) business.

Although Lotte Rental has recorded excellent profitability, Lotte decided to sell it, stating that the nature of the rental business does not align with the group’s growth strategy. Lotte announced that it will focus on fostering the mobility sector, one of the four major new growth engines of the group, centered on technology-based businesses such as electric vehicle charging and autonomous driving.

A Lotte official said, "The funds raised through the main contract will be used to improve the financial structure of Hotel Lotte and Busan Lotte Hotel and to strengthen the hotels’ fundamental competitiveness."

This content was produced with the assistance of AI translation services.