Lotte GRS exits Indonesia as it reels from pandemic Franchise operator’s Indonesian operations in process of being liquidated

Translated by Ryu Ho-joung 공개 2021-04-14 07:39:21

이 기사는 2021년 04월 14일 07:33 더벨 유료페이지에 표출된 기사입니다.

Lotte GRS, which operates the burger chain Lotteria, is retreating from the Southeast Asia market as the Covid-19 pandemic took a toll on the company’s overseas business.

The Seoul-based company is in the process of liquidating PT Lotteria Indonesia and is also effectively discontinuing operations at Vietnam Lotteria, industry sources said.

The two subsidiaries are temporarily held by Lotte Corporation, the holding company of Lotte Group, instead of Lotte GRS due to legal reasons as the conglomerate revamped its governance structure with a shift to a holding company system in 2017.

It became possible in January to transfer shareholdings in PT Lotteria Indonesia and Vietnam Lotteria back to Lotte GRS. However, they are still placed under Lotte Corporation because both the burger chain operator and the two subsidiaries took a severe hit during the pandemic.

PT Lotteria Indonesia, which has more than 20 stores in the country, recorded a net loss of 7 billion won ($6.2 million) in 2020. It is in the process of being liquidated, with Lotte Corporation having written off its equity investment in the unit last year to reduce the book value to zero.

Vietnam Lotteria also made losses last year, and Lotte Corporation determined the impairment of its equity investment in the business, reducing the book value from 26.8 billion won to 15.6 billion won.

Apart from the two overseas subsidiaries, Lotte GRS invested 15.5 billion won last year to establish a new subsidiary in Vietnam that supplies raw materials with ambitions to expand its presence in the region. However, its growth plans also hit a snag due to the ongoing pandemic.

Lotte Group said Vietnam Lotteria can be transferred to Lotte GRS but added that the timing could be delayed because its business situation is not good. (Reporting by Hyo-jeom Jun)
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