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Lotte Said to Plan $1 Billion IPO of Malls in Singapore

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July 23 (Bloomberg) -- Lotte Shopping Co., South Korea’s largest department store operator, is planning an initial public offering in Singapore of some of its shopping malls, said two people with knowledge of the matter.

The sale may raise at least $1 billion and could take place as early as this year, said the people, asking not to be identified as the process is private. The company is still deciding which properties it will include in the sale, which will either be in the form of a business trust or a real-estate investment trust, the people said.

At $1 billion, the IPO would be the third-largest in Singapore this year after sales by Mapletree Greater China Commercial Trust and Asian Pay Television Trust, data compiled by Bloomberg show. REITs and business trusts were the biggest fundraisers in Singapore’s IPO market in the past year, raising $4.6 billion out of a total $5.3 billion, the data show.

DBS Group Holdings Ltd., Goldman Sachs Group Inc., Nomura Holdings Inc. and Standard Chartered Plc are managing the sale, the people said.

A call to Lotte Shopping today was unanswered. The company said on June 24 that it’s considering the sale and lease back of real estate assets, without offering any details on timing or value. IFR reported the Singapore IPO plan last month.

Subsidiaries

Lotte Shopping has 44 department stores in South Korea, one each in Russia and Indonesia, and five in China, according to its first quarter earnings statement published in May. The company also has 111 domestic hypermarkets and 164 hypermarkets in China, Vietnam and Indonesia, according to the statement.

The company, which opened its first department store in South Korea in 1979, spent 1.25 trillion won ($1.1 billion) for a controlling stake in electronics retailer Himart Co. last year. Lotte Shopping’s other subsidiaries include credit card company Lotte Card Co. and Korea Seven Co., a convenience store joint venture with 7-Eleven Inc., according to the company’s website.

Lotte Shopping is a unit of Lotte Group, a South Korean chaebol or conglomerate founded by Shin Kyuk Ho in Japan in 1948 as a bubble-gum maker. The Korean-Japanese businessman opened his first confectionery plant in South Korea after the normalization of relations between the two North Asian nations, building Lotte into a food and leisure group spanning hotels, confectionary and an amusement park in Seoul.

To contact the reporter on this story: Joyce Koh in Singapore at jkoh38@bloomberg.net

To contact the editors responsible for this story: Stephanie Wong at swong139@bloomberg.net; Philip Lagerkranser at lagerkranser@bloomberg.net