Lotte has completed the sale of management control of Lotte Rental. Lotte said on Oct. 30 it closed a deal to transfer the full 61.2 percent stake in Lotte Rental held by Hotel Lotte and Busan Lotte Hotel to TPG. TPG is an alternative asset manager that invests in assets other than stocks and bonds. The share purchase agreement for the deal was signed on Aug. 11. The sale price was 59,000 won per share, for a total of about 1.31 trillion won.

Lotte will use the funds it secured to strengthen the financial soundness of Hotel Lotte and Busan Lotte Hotel. The company said it also plans to use the money to bolster fundamental competitiveness and secure future growth engines. Lotte Rental plans to firm up its growth base by using TPG's global investment capabilities and network. It also plans to focus on raising the competitiveness of its existing businesses and its mid- to long-term growth potential.

The sale is part of Lotte's efforts since last year to reshape the group's portfolio around non-core businesses and low-efficiency assets. Lotte Chemical has begun restructuring its basic chemicals businesses in Yeosu and Daesan, which produce commodity chemical products, to shift its business structure toward high value-added specialties. It is also working to improve efficiency in non-core businesses including its Pakistan unit, Titan's Malaysia unit and its building materials business.

Lotte Energy Materials is shifting its business structure toward high value-added businesses, including energy storage system battery foil products and circuit foil for semiconductors. It has also continued portfolio reshaping, including the sale of Lotte Ecoroll. Lotte Shopping and Hotel Lotte are streamlining idle land and low-efficiency stores amid an improving earnings trend. The sale of L7 Gangnam is also included in asset efficiency work.

A Lotte official said, "We decided on the acquirer after comprehensively considering Lotte Rental's fundamental competitiveness and mid- to long-term growth potential, and we hope it will continue sustainable growth with its new shareholder." The official added, "Lotte will also step up adjustments to the group's portfolio while closely reviewing each business' profitability, growth potential and strategic fit to improve financial soundness and firmly strengthen the foundation for sustainable growth."