Lotte ‘has suitors for China supermarkets’, aims for sale this year

South Korea-based Lotte Group said Thursday that several companies panies have expressed an interest in acquiring its Lotte Mart stores in the Chinese mainland and that it aims for a sale by the end of this year.

The country’s No.5 conglomerate decided to bow out of the business after most of its hypermarkets markets and supermarkets in China were shut down amid bilateral political tensions

“We are in detailed talks with some of those companies,” Lim Byung-yun, an executive vice president at Lotte Corp, said at

a news conference to mark the launch of the group’s new holding company.

The deal is expected to be small at a couple of hundred million dollars, a banking source said, declining to be identified as the talks were confidential.

Lotte, already reeling from internal power struggles and a corruption scandal, has been particularly hard hit by political friction after it agreed to hand over land for a US-made missile defense system.

Even before the disputes, Lotte’s Chinese hypermarket operation had been generating operating losses of well over 100 billion won ($88 million) per year for the past three years, Fitch Rating said in a report last month.

Listing the group’s Hotel Lotte unit will take time, Lotte Corp executive Lee Bong-chul said, noting that the political tensions have reduced the number of Chinese tourists visiting South Korea, hurting sales of both its hotel and its duty-free businesses.

The offering was delayed following a corruption scandal involving Lotte Group Chairman Shin Dong-bin.

He is on trial after prosecutors indicted him and other executives on embezzlement and other charges. Shin has denied the charges.

Before the scandal and decline in Chinese tourist numbers, the hotel IPO had been expected to be worth around $4.5 billion.

A power struggle between Shin and his elder brother Shin Dong-joo put pressure on the conglomerate to improve transparency, prompting it to form the new holding company Lotte Corp, which will make its debut on South Korea’s main stock market on October 30.