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Full Version: Bloomberg: S. Korea's Lotte 'planning IPO in Singapore for malls'
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Depending on how it is structured and the pricing - this is likely to be a quality BT or REIT in the making.

Any buddies with insights to S Korean REIT market (if they exists), would appreciate inputs...


S. Korea's Lotte 'planning IPO in Singapore for malls'

Published on Jul 24, 2013

LOTTE Shopping, South Korea's largest department store operator, is planning an initial public offering (IPO) in Singapore for some of its shopping malls, said two people with knowledge of the matter.
The sale may raise at least US$1 billion (S$1.26 billion) and could take place as early as this year, said the people, asking not to be identified as the process is private.
The company is still deciding which properties it will include in the sale, which will either be in the form of a business trust or a real estate investment trust, they said.
At US$1 billion, the IPO would be the third-largest in Singapore this year after sales by Mapletree Greater China Commercial Trust and Asian Pay Television Trust, data compiled by Bloomberg shows.
Reits and business trusts were the biggest fund-raisers in Singapore's IPO market in the past year, raising US$4.6 billion out of a total US$5.3 billion, the data shows.
DBS Group Holdings, Goldman Sachs Group, Nomura Holdings and Standard Chartered are managing the sale, the people said.
Lotte said last month that it was considering the sale and lease back of real estate assets, without offering any details on timing or value.
Subsidiary Lotte Shopping has 44 department stores in South Korea, one each in Russia and Indonesia, and five in China, according to its first-quarter earnings statement published in May.
The company also has 111 domestic hypermarkets and 164 hypermarkets in China, Vietnam and Indonesia, according to the statement.
The company, which opened its first department store in South Korea in 1979, spent 1.25 trillion won (S$1.41 billion) for a controlling stake in electronics retailer Himart Co last year.
Lotte Shopping's other subsidiaries include credit card company Lotte Card Co and Korea Seven Co, a convenience store joint venture with 7-Eleven, according to the company's website.
Lotte Shopping is a unit of Lotte Group, a South Korean chaebol or conglomerate founded by Shin Kyuk Ho in Japan in 1948 as a bubble- gum maker.
Lotte Shopping Seeks Trust IPO in Singapore
Asian Wall Street Journal:

SINGAPORE—South Korea's Lotte Shopping Co. 023530.SE +1.63% has sought regulatory approval in Singapore to hold an initial public offering of a real-estate investment trust that could raise as much as US$1 billion, people with knowledge of the deal said Monday, in the latest and biggest of trust listings slated for the city-state in the next few months.

Lotte will put its Korean shopping malls in the REIT, the people said.

Still room for more REITs?

Lotte Shopping wins approval for S$1.26b IPO on SGX: Sources

SINGAPORE — South Korean retail giant Lotte Shopping has received approval from the Singapore Exchange for an initial public offering of its shopping malls in a deal that could raise as much as US$1 billion (S$1.26 billion), people with knowledge of the deal said yesterday.

The offering would be the biggest overseas IPO by a Korean company.

Lotte is planning to put some of its Korean shopping malls in a trust that will list in Singapore at a time of falling global stock markets and rising volatility. It aims to start testing investors’ appetite for its IPO within the next two weeks and list on the Singapore bourse by the end of the first quarter, the sources said. It is planning to offer a yield between 6 and 7 per cent.
In a bad time like this when there are many trial and tested local REITs being sell down to dirt cheap prices with yield easily exceed 7% ( some close to 8% ), would you risk your hard earn money into a new IPO with the assets held in an unfamiliar foreign ground with unknown management ?

I will most likely not !

Questions that I will be asking myself :

1. Will it goes underwater on the first day of IPO ?
2. Will it end up like Saizen REIT ?
3. Will it end up like STX PO ?
4. Will it end up like S-Chips ? Big Grin
Lotte is well known... it is more likely to end up like Hutch Port...
SGX the land of reits~ lol
(06-02-2014, 06:12 PM)specuvestor Wrote: [ -> ]Lotte is well known... it is more likely to end up like Hutch Port...

The master has spoken !

Me mountain turtle just trying to throw in some scenerios.
No pun intended ! Big Grin
my 7yo nephew knows lotte from his lotte chocolate sticks sold at the supermarkets.
On a serious note, big brand doesn't automatically mean they are safe to invest. Large company with big names can also go bust if mismanage.

I remember STX Pan Ocean made such a big impact when they list their IPO here in Singapore many years back.
Now,they have already file for bankruptcy protection.

I know we cannot compare Lotte with STX Pan Ocean cause they are in different sector. What I am saying here is that we don't just jump in just because a big name is listing here.
Lotte need to convince us why we should invest in a Korean REIT instead of a Singapore based REIT.

Will the IPO be so overpriced that those subscribe to IPO from day 1 is still suffering from losses until today just as LMIR ?

Will it be like the case of Saizen REIT, where sub-standard assets are packaged into the REIT with sky high IPO price. Investor only realised that the REIT cannot pay out committed dividend after 1 or 2 years down the road, and still suffering from heavy losses till today ?

I know I talk too much here. May be the Lotte and the IPO manager want to hammer me ! Big Grin

Still, Lotte need to convince me why I should throw my hard earned money into a new IPO with the assets and management in the foreign ground.
South Korea is a ticking time bomb for economic apocalypse. You need to bear the usual risk of business and the added risk of north korea.
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