SEOUL, Dec. 7 (Korea Bizwire) – South Korean retail giant Lotte’s hotel unit has been working on an employee stock ownership scheme as part of preparations to list its stocks on the Seoul bourse, company officials said Sunday.
Hotel Lotte, a unit of South Korea’s fifth-largest conglomerate Lotte Group, plans to submit an application next month for a preliminary regulatory review of its initial public offering (IPO).
The company said it has been preparing to establish an employee stock ownership association under the regulation that requires assignment of 20 percent of new shares to its employees.
“We have been working on establishing the employee stock ownership association, briefing labor union officials and employees on the plan in mid-November,” a company official told Yonhap News by phone, asking for anonymity.
The company said it will receive applications and appoint the association chief in accordance with the IPO preparation.
Up to 3,000 employees working for the hotel, duty free and other divisions will be eligible to join the association, according to the company.
The listing of Hotel Lotte is one of the reform pledges that Lotte Group Chairman Shin Dong-bin has made to assuage public disgust over a bitter family feud over control of the retail-focused conglomerate, which has sprawling businesses both in South Korea and Japan.
On Thursday, Lotte said its Japanese shareholders support the current leadership despite the ongoing succession feud, in an effort to clear up uncertainties surrounding the preparation for listing its hotel unit.
The conglomerate earlier said Hotel Lotte is expected to have a market capitalization of around 10 trillion won ($8.6 billion) when it is publicly traded, but market watchers say losing one of its duty-free stores in Seoul in the recent competition could lead to that re-evaluation of its market value.