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Lotte chairman buys 1.3 pct stake in confectionery unit
By Shin Ji-hyePublished : Aug. 28, 2015 - 21:03
Lotte Group Chairman Shin Dong-bin bought a 1.3 percent stake in Lotte Confectionery Co. from a construction unit after the market closing on Friday in a bid to help resolve the group's complex cross-shareholding structure, the retail giant said.
Shin bought 19,000 shares from Lotte Construction Co. to raise his stake to 6.7 percent in the confectionery company, a deal estimated at 35.8 billion won (US$30.5 million), Lotte Group said.
"(Shin) purchased shares in Lotte Confectionery to resolve part of the cross-shareholding structure to speed up the process to improve the corporate governance structure," Lotte Group said in a release.
Considering the relatively small amount of money needed for the latest reorganization of the cross-shareholding structure, Shin was able to swiftly resolve the matter with his private funds, but company officials say that the group will need more time to raise necessary capital for its next steps.
Lotte Group said its goal is to clear up about 80 percent of its existing cross-shareholding structure by the end of November this year.
In the mid- to long-term period, Lotte will push to set up an official holding firm, which is expected to cost the group several trillions of won.
Shin mentioned earlier this month that the conglomerate will spend up to 7 trillion won in refurbishing its corporate governance structure.
Industry watchers say that Lotte affiliates will need to buy or sell one another's shares to further simplify the current web of cross-shareholding, adding that Shin may again choose to use his private assets if the situation calls for it.
The nation's fifth-largest conglomerate, whose businesses range from food and retail to construction and chemicals, has been making efforts to improve its corporate transparency following a barrage of criticism over its complex cross-shareholding structure.
Lotte had been embroiled in a bitter family fight over control of the sprawling business empire, which has reignited sentiment against family-controlled conglomerates, known as chaebol here, and prompted an all-out government probe into the group.
Anti-chaebol sentiment has also been building up, which for Lotte translates into a possible boycott of its services and products by consumers, a substantial threat for the heavily retail-focused company.
On Wednesday, Lotte launched a task force on reforming its governance structure, vowing to improve transparency in the management. (Yonhap)
Shin bought 19,000 shares from Lotte Construction Co. to raise his stake to 6.7 percent in the confectionery company, a deal estimated at 35.8 billion won (US$30.5 million), Lotte Group said.
"(Shin) purchased shares in Lotte Confectionery to resolve part of the cross-shareholding structure to speed up the process to improve the corporate governance structure," Lotte Group said in a release.
Considering the relatively small amount of money needed for the latest reorganization of the cross-shareholding structure, Shin was able to swiftly resolve the matter with his private funds, but company officials say that the group will need more time to raise necessary capital for its next steps.
Lotte Group said its goal is to clear up about 80 percent of its existing cross-shareholding structure by the end of November this year.
In the mid- to long-term period, Lotte will push to set up an official holding firm, which is expected to cost the group several trillions of won.
Shin mentioned earlier this month that the conglomerate will spend up to 7 trillion won in refurbishing its corporate governance structure.
Industry watchers say that Lotte affiliates will need to buy or sell one another's shares to further simplify the current web of cross-shareholding, adding that Shin may again choose to use his private assets if the situation calls for it.
The nation's fifth-largest conglomerate, whose businesses range from food and retail to construction and chemicals, has been making efforts to improve its corporate transparency following a barrage of criticism over its complex cross-shareholding structure.
Lotte had been embroiled in a bitter family fight over control of the sprawling business empire, which has reignited sentiment against family-controlled conglomerates, known as chaebol here, and prompted an all-out government probe into the group.
Anti-chaebol sentiment has also been building up, which for Lotte translates into a possible boycott of its services and products by consumers, a substantial threat for the heavily retail-focused company.
On Wednesday, Lotte launched a task force on reforming its governance structure, vowing to improve transparency in the management. (Yonhap)
