Hotel Lotte joined Lotte Biologics' shareholder roster at the end of last year and will participate in the biopharmaceutical company's seventh capital increase worth 255.3 billion won next month, according to the Financial Supervisory Service's electronic disclosure system on the 24th. The capital increase, aimed at funding construction of the first factory at the Songdo Bio Campus, involves three shareholders: Lotte Corporation (60.74% stake), Hotel Lotte (19.07%), and Japan's Lotte Holdings (20.11%). Analysts interpret Hotel Lotte's participation as serving dual purposes—reducing Lotte Corporation's financial burden and potentially enhancing Hotel Lotte's corporate value ahead of a long-discussed IPO and possible merger with Lotte Corporation to restructure the group's Korea-Japan ownership framework. Lotte Corporation's net debt reached 3.5 trillion won in Q1 this year after consecutive capital injections into Lotte Chemical and Lotte Biologics, while Lotte Biologics has received 1.5 trillion won from the group since inception but remains unprofitable, according to Korea Ratings.
Hotel Lotte Participates in 255.3 Billion Won Capital Increase for Songdo Factory
The capital increase next month is structured as a shareholder allocation to fund construction of Lotte Biologics' first factory at the Songdo Bio Campus. Current ownership stands at Lotte Corporation 60.74%, Hotel Lotte 19.07%, and Lotte Holdings 20.11%. Hotel Lotte entered the shareholder list at the end of last year, becoming the third investor alongside Lotte Corporation and Japan's Lotte Holdings. Industry observers attribute the new investor's participation to the need to distribute the financial burden, as Lotte Biologics has received 1.5 trillion won from the group since its launch but remains unprofitable.
Hotel Lotte Holds Strategic Stakes Across Lotte Group Companies
Hotel Lotte's largest shareholder is Japan's Lotte Holdings at 19.07%. Hotel Lotte holds 13.73% of Chairman Shin Dong-bin's shares and 11.64% of Lotte Corporation's shares. Beyond the holding company, Hotel Lotte directly owns stakes in core affiliates including Lotte Construction (43.30%), Lotte Mulsan (32.83%), and Lotte Shopping (8.86%). Gwangyunsa, which holds 28.14% of Lotte Holdings, sits at the apex of the group's governance structure. The ownership chain flows as: Gwangyunsa → Lotte Holdings → Hotel Lotte → Lotte Corporation → domestic affiliates. Chairman Shin Dong-bin holds only 2.69% of Lotte Holdings shares directly.
Lotte Corporation Net Debt Reaches 3.5 Trillion Won After Biologics Investments
Lotte Corporation's net debt on a standalone basis reached 3.5 trillion won in Q1 this year after consecutive capital injections into Lotte Chemical and Lotte Biologics, according to Korea Ratings. The financial burden prompted the need to share investment responsibilities. Hotel Lotte, which operates hotels and duty-free businesses as its core operations, was selected as a suitable investor outside the holding company structure. A Lotte Corporation official stated that Hotel Lotte's investment participation was a strategic management decision considering Lotte Biologics' business direction and synergies among affiliates.
Analysts Link Hotel Lotte Investment to IPO and Merger Scenario
Lee Sang-heon, a researcher at iM Securities, stated that Lotte would likely list Hotel Lotte and merge it with Lotte Corporation to achieve independence from Japan, and that Hotel Lotte participated as a new investor in Lotte Biologics with a mid- to long-term merger in mind to make Hotel Lotte a key subsidiary. Lee added that since Japanese capital served as seed money to grow Korean Lotte, setting an appropriate IPO price when Hotel Lotte lists would provide justification for selling existing shares. Hotel Lotte's first IPO attempt in 2016 projected a corporate value of up to 20 trillion won, but the listing was canceled due to prosecution investigations of the owner family. The duty-free business subsequently contracted during the THAAD incident and COVID-19. The Lotte Corporation official stated that the company continues to monitor the situation regarding Hotel Lotte's IPO but nothing has been decided concretely.
FAQ
What is the size of Lotte Biologics' seventh capital increase?
The seventh capital increase is worth 255.3 billion won and will take place next month. The funds are designated for construction of the first factory at the Songdo Bio Campus.
Who are the current shareholders of Lotte Biologics?
Lotte Biologics has three shareholders: Lotte Corporation holds 60.74%, Hotel Lotte holds 19.07%, and Japan's Lotte Holdings holds 20.11%. Hotel Lotte joined the shareholder list at the end of last year.
How much has Lotte Biologics received from the group since inception?
Lotte Biologics has received 1.5 trillion won from the Lotte Group since its launch, but the company remains unprofitable according to Korea Ratings.
