SEOUL, Aug. 31 (Korea Bizwire) – Lotte Shopping Co., the retail unit of Lotte Group, said Thursday its plan to hive off the cinema department into a separate company has been postponed due to a court decision.
In June, the company’s board members approved the plan to spin off its cinema business as a subsidiary as of Sept. 1 in order to maximize its management effectiveness by pouring more resources into the retail businesses. The spun-off company was to be specialized in operating movie theaters as well as in investing and distributing cinema content.
A local court, however, turned down the plan on Thursday, saying the business value of the cinema department, which is used to determine the amount of investment to be injected into the new company, was overrated, according to Lotte Shopping.
Lotte Shopping said it will recalculate the figures based on the court’s comments and complete the spin-off plan within the year.
Lotte Shopping currently operates Lotte’s key retail chains of Lotte Department Store, Lotte Mart, Lotte HiMart, and major theater chain Lotte Cinema.
Lotte Cinema generated over 600 billion won (US$534.5 million) in sales and some 40 billion in business profits last year, according to the company.