South Korea’s Lotte Group aims to sell its Lotte Mart stores in China by the end of this year, a company executive said on Thursday, adding that several firms have expressed interest in the troubled unit.
The country’s No.5 conglomerate decided to bow out of the business after most of its hypermarkets and supermarkets in China were shut down amid political tensions between the two countries.
“We are in detailed talks with some of those companies,” Lim Byung-yun, an executive vice president at Lotte Corp, the group’s newly launched holding company, said at a news conference.
The size of the deal is expected to be small at a couple hundred million dollars, a banking source said, declining to be identified as the talks were confidential.
Lotte has been particularly hard hit by the political friction after it agreed to hand over land in southern South Korea for a U.S.-made missile defense system – a plan that has angered Beijing which argues that the radar can penetrate far into its territory.
Goldman Sachs has been picked to managed the sale.
Lotte Corp executive Lee Bong-chul said it would take time to list the group’s Hotel Lotte unit, as political tensions with China have resulted in declines in the number of Chinese tourists visiting South Korea, hurting sales of both its hotel and its duty free businesses.
The offering, expected to be worth around $4.5 billion, was delayed following a corruption scandal involving Lotte Group Chairman Shin Dong-bin. He is on trial after prosecutors indicted him and other executives on embezzlement and other charges. Shin has denied the charges.