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Hotel Lotte to list as early as May in largest Korea IPO since 2010

[SEOUL] Hotel Lotte Co, the lodgings and duty-free sales unit of conglomerate Lotte Group, could go public as soon as May, the Korea Stock Exchange said after approving its listing application, setting the stage for potentially the largest South Korean public offering in recent years.

The impending IPO could give impetus for Lotte Group to list its other units, according to the exchange in an e-mailed statement. Lotte Chairman Shin Dong Bin, caught in a power struggle with his elder brother for control, promised in September to improve corporate governance in the group started by his father in Japan in 1948.

"We expect the current Hotel Lotte IPO to give momentum to other Lotte Group affiliates including Lotte Data Communication Co, Korea Seven Co, and Lotteria Co to list their shares," the Korea Stock Exchange said. Hotel Lotte is expected to draft detailed IPO plans after finalizing its 2015 results at its March annual shareholders meeting, the exchange said.

The exchange did not provide details on the IPO including size and the price range, or whether the other Lotte Group units have applied for listing. Lotte Data Communication is an information technology consulting service provider, Korea Seven operates convenience stores, while Lotteria runs a chain of fast-food restaurants.

Hotel Lotte submitted its application in December, without providing financial terms. Yonhap News reported Jan 24 that Hotel Lotte could raise about 4 trillion won (S$4.7 billion), while IFR reported Jan 13 the IPO would rake in between US$3 billion to US$5 billion.

The last time a Korean initial public offering exceeded US$2 billion was in 2010, when Samsung Life Insurance Co raised US$4.3 billion, according to data compiled by Bloomberg.

A separate unit, plastics manufacturer Lotte Chemical Corp, is also exploring an IPO of its Malaysian petrochemicals arm Lotte Chemical Titan Holding Sdn that could raise more than US$500 million, people with knowledge of the matter said earlier this month.