[Alpha Biz= Kim Jisun] Lotte Global Logistics, a logistics subsidiary of Lotte Group, has initiated its initial public offering (IPO).
On Monday, Lotte Global Logistics submitted its securities registration statement to the Financial Services Commission and announced its public offering schedule for listing on the Korea Stock Exchange (KOSPI).
The number of shares offered is 14.94 million shares (50% new shares and 50% existing shares), with an offering price range of 11,500 to 13,500 KRW per share. The expected offering amount is between 171.8 billion KRW and 201.7 billion KRW. The estimated market capitalization after listing is expected to be between 478.9 billion KRW and 562.2 billion KRW.
There were earlier projections that Lotte Global Logistics could be valued at around 1 trillion KRW, but some analysts suggest that the company has lowered its valuation expectations significantly.
Lotte Global Logistics plans to conduct a demand forecast for institutional investors from April 24 to 30, finalize the offering price, and proceed with the subscription on May 12 to 13. The lead underwriters are Korea Investment & Securities and Samsung Securities, with KB Securities acting as a co-manager.
The shares to be sold by existing shareholders are held by LLH, a limited liability company established by financial investor H Private Equity, which owns 21.87% (7.47 million shares) of the company. The average acquisition price is 37,339 KRW per share. The sale of existing shares means that current shareholders are selling their shares to attract new investors.
LLH entered into a put option agreement in 2017 when it invested 286 billion KRW in Lotte Global Logistics, guaranteeing compensation from Lotte if the offering price was lower than the acquisition price. If Lotte Global Logistics lists at the proposed offering price, it is expected that more than 200 billion KRW will need to be paid to LLH.
Lotte Global Logistics plans to use the funds raised from the IPO to enhance its logistics infrastructure and strengthen its global business network.
With 21 terminals, 37 branches, and a network of over 1,000 agencies across the country, Lotte Global Logistics handles approximately 500 million shipments annually. It ranks second in the domestic logistics industry, following CJ Logistics.
For the last year, the company's consolidated revenue was 3.5733 trillion KRW, a 1.1% decrease compared to the previous year, while operating profit increased by 41.1% to 90.2 billion KRW. Net profit increased by 173.3%, reaching 40.5 billion KRW.
Lotte Global Logistics was established in 2019 after the merger of Hyundai Logistics (founded in 1988) and Lotte Logistics (established in 1996).
Currently, Lotte Group holds a 71.08% stake in Lotte Global Logistics, LLH holds 21.87%, and institutions and individuals own 7.05%. After the listing, it is expected that Lotte Group’s stake will decrease to 58.33%, with institutions and individuals holding 41.67%.
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
