Lotte Shopping wins approval for S$1.26b IPO on SGX: Sources

SINGAPORE — South Korean retail giant Lotte Shopping has received approval from the Singapore Exchange for an initial public offering of its shopping malls in a deal that could raise as much as US$1 billion (S$1.26 billion), people with knowledge of the deal said yesterday.

The offering would be the biggest overseas IPO by a Korean company.

Lotte is planning to put some of its Korean shopping malls in a trust that will list in Singapore at a time of falling global stock markets and rising volatility. It aims to start testing investors’ appetite for its IPO within the next two weeks and list on the Singapore bourse by the end of the first quarter, the sources said. It is planning to offer a yield between 6 and 7 per cent.

A Lotte spokesman declined to comment on the IPO’s progress, but said the firm is looking to expand its retail business in Asia, and it wants to raise its brand awareness by listing in Singapore. “Also, some investors in South-east Asia are showing an interest in Lotte’s business,” he said.

Singapore is a sought-after destination for trust listings. Deals worth about US$3 billion are in the works, including a US$700 million offering by Indian conglomerate Larsen & Toubro, which is looking to list some of its Indian toll roads.

The Singapore Exchange is home to nearly 50 trusts with a combined market capitalisation of around US$65 billion.

These trusts offer yields that are generally between 6 and 7 per cent a year, which is attractive when compared with banks in the city-state that tend to offer 0.2 per cent on 12-month Singapore-dollar deposits.

Lotte Shopping is an affiliate of South Korean conglomerate Lotte Group, whose business interests range from real estate to confectioneries to movie theatres.

Lotte Shopping reported 21.6 trillion won (S$25.3 billion) in revenue for the first nine months of last year, up 16.7 per cent from a year earlier, according to its third-quarter earnings statement. Net profit was 782 billion won, up 2 per cent. DBS Bank, Goldman Sachs, Nomura Holdings and Standard Chartered Bank are advising Lotte on the deal. DOW JONES