Lotte Global Logistics Launches IPO... Files Securities Registration Statement

Institutional Demand Forecast Scheduled for April 24-30
Subscription to Take Place on May 12-13

Lotte Global Logistics, the logistics subsidiary of Lotte Group, has launched its initial public offering (IPO).

On the 24th, Lotte Global Logistics announced that it submitted a securities registration statement to the Financial Services Commission and entered the public offering schedule for listing on the Korea Composite Stock Price Index (KOSPI).

The number of shares to be offered is 14,944,322 shares (50% new shares and 50% existing shares), with a desired price range of 11,500 to 13,500 KRW per share. The expected amount to be raised is between 171.8 billion and 201.7 billion KRW. The market capitalization after listing is estimated to be between 478.9 billion and 562.2 billion KRW.

There were forecasts that Lotte Global Logistics' valuation could reach around 1 trillion KRW at one point, but analysts say the company has significantly lowered its expectations.

Lotte Global Logistics plans to conduct a demand forecast for institutional investors from April 24 to 30 to finalize the offering price and proceed with subscription on May 12 and 13. The lead underwriters for the listing are Korea Investment & Securities and Samsung Securities, with KB Securities as a co-underwriter.

The existing shares to be sold are 21.87% (7,472,161 shares) held by LLH, a limited liability company established by the financial investor (FI) H Private Equity. The average acquisition price per share is 37,339 KRW. The sale of existing shares means that current shareholders are selling their shares to attract new shareholders.

In 2017, LLH invested 286 billion KRW in Lotte Global Logistics and signed a put option contract with Lotte to compensate the difference if the IPO price is lower than the acquisition price per share. If Lotte Global Logistics is listed at the desired offering price, it is expected to pay more than 200 billion KRW to LLH.

Lotte Global Logistics plans to use the funds raised through the listing to enhance its logistics infrastructure and strengthen its global business network.

Based on a network of 21 terminals nationwide, 37 branches, and about 1,000 agencies, it handles approximately 500 million shipments annually. It holds the second-largest market share in the domestic logistics industry, following CJ Logistics.

Last year, on a consolidated basis, sales decreased by 1.1% year-on-year to 3.5733 trillion KRW, operating profit increased by 41.1% to 90.2 billion KRW, and net profit rose by 173.3% to 40.5 billion KRW.

Lotte Global Logistics was established in 2019 through the merger of Hyundai Logistics, founded in 1988, and Lotte Logistics, established in 1996.

Currently, the major shareholders of Lotte Global Logistics are Lotte Group, including Lotte Holdings, with a 71.08% stake, LLH with 21.87%, and institutions and individuals holding 7.05%. After listing, the ownership structure is expected to be reorganized to 58.33% for Lotte Group and 41.67% for institutions and individuals.

Kang Byung-gu, CEO of Lotte Global Logistics, said, "Through listing on the Korea Composite Stock Price Index, we will further strengthen our competitiveness in the global logistics market and strive for sustainable growth."