이 기사는 2021년 07월 15일 07:53 thebell 에 표출된 기사입니다.

Financial investors in South Korean car rental service provider Lotte Rental will make a full exit from the company in its initial public offering planned in August, relieving a financial burden on its largest shareholder Hotel Lotte.

Lotte Rental will sell a total of 14.42 million shares in the offering. Some 7.2 million, or 50% of the total, will be newly issued, while the remaining half will be sold by existing shareholders Gross Partner and Lotte Non-Life Insurance.

Gross Partner and Lotte Non-Life Insurance currently have about 5.77 million shares (19.61%) and 1.45 million shares (4.9%) in the car rental company, respectively. They intend to sell them all in the IPO, which are estimated to be worth 340 billion won ($296.3 million) and 85 billion won, respectively, at the higher end of a 47,000-59,000 won target price range.

The IPO will help ease a financial burden on the company’s largest shareholder Hotel Lotte. In 2015, Hotel Lotte acquired Lotte Rental, formerly KT Rental, for 1.02 trillion won in partnership with five financial investors.

At the time, Hotel Lotte entered with each of them a total return swap agreement structured to guarantee the principal and an annual return of about 3% for five years, with the hotel having the right of first refusal.

Three of the investors sold their holdings in Lotte Rental to Hotel Lotte in the first half of 2020 after the swap contracts expired. Of the remaining two investors – Gross Partner and investment firm Red Stock – Red Stock sold its shares to the hotel for 45.2 billion won in May this year as the IPO was delayed.

If the listing had been further delayed to next year, Hotel Lotte would have had to purchase Gross Partner’s 19.61% stake in Lotte Rental. Gross Partner is a special purpose vehicle, managed by Mirae Asset Securities, whose anchor investor is South Korea’s state pension fund National Pension Service.

Gross Partner has a priority right to sell its shares in the IPO. Lotte Rental’s target price range represents an enterprise value of about 2 trillion won. If the offering hits the top of its price range, Gross Partner will make a 130 billion won gain.

Lotte Non-Life Insurance will also sell its 4.9% stake in Lotte Rental. The insurer changed hands after being acquired by private equity firm JKL Partners in 2019.

The lock-up period for shares held by the company’s largest and second largest shareholders, Hotel Lotte (47.06%) and Hotel Lotte Busan (28.43%), is six months from the IPO date. (Reporting by Chan-mi Oh)