The exit plan by Lotte Mart, a discount store unit of South Korea’s retail conglomerate Lotte Group that received a direct blow from China’s economic retaliation after its parent group yielded its golf club site to host U.S. antimissile system last year, picked up speed with buyers taking specific actions to acquire the grocery shop chain.
According to Lotte Group on Friday, China’s retailer Liqun Group has kicked off due diligence on Lotte Mart’s remaining 70 stores in China. The group has been contacting potential buyers since September to exit from China that had been harsh on its retail business. Three or four other bidders also were allowed to conduct due diligence.
Shares of Lotte Shopping that reflects the Chinese operation of Lotte Mart on Friday ended up 2.92 percent at 229,000 won from the previous session.
Lotte Group hopes to wind up the sales within the first half of this year before its emergency working capital funding of 700 billion won ($655 million) injected into its Chinese unit runs out.
Lotte Mart’s losses expanded at a yawning pace after 87 of its total 99 stores were suspended last year due to Beijing’s retaliatory actions and boycott campaign in response to Seoul’s installation of U.S. Terminal High Altitude Area Defense (THAAD) anti-missile system. Its losses are estimated at 1.2 trillion won.
Liqun Group, Qingdao-based Chinese retailer founded in 1933, reported 1.78 trillion won ($1.67 billion) in revenue last year.
By Lee Han-na and Lee Ha-yeon
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]