South Korea's Lotte considers withdrawing from troubled overseas duty-free stores; Chemicals to promote asset sales

South Korea's Lotte is considering withdrawing from its overseas duty-free stores that are underperforming, in order to improve the financial structure of its struggling duty-free business.
On the afternoon of the 28th, the company held a corporate information session (IR) for institutional investors at the Teachers' Mutual Aid Association in Yeouido, Seoul, and
Lotte, Lotte Chemical, Lotte Construction, Lotte Shopping, etc. announced financial restructuring measures. In the hotel division, they will start with the duty-free division, which has been slow to recover, and will work to improve the efficiency of stores.
In order to achieve this, Lotte Duty Free is considering withdrawing from unreliable overseas duty free stores. Lotte Duty Free operates four city duty free stores and eight airport duty free stores in Japan, Vietnam, Australia, and other countries.
Lotte Hotel currently has 1.1 trillion won (US$1.14 billion) in cash assets and is restructuring its existing hotel in World Tower to reduce fixed costs.
The hotel plans to reduce its operating floor space and promote structural reform. Lotte Chemical, which is facing a corporate bond crisis, is selling off low-profit assets. It has already started a cost reduction project at its Yeosu and Daesan plants.
The company is currently in the process of implementing a restructuring plan, and has decided to work on improving its financial structure by investing in EBITDA (earnings before interest, taxes, and depreciation) from next year onwards, with the aim of reducing excessive investment.
In addition, the company plans to reduce the ratio of basic chemicals from the current 50% to 30% by 2030.
The company has decided to strengthen the bank guarantee by using the valuable Lotte World Tower as collateral. After the creditors' meeting, the company will obtain the court's permission to convert the corporate bonds into guaranteed bonds by January 14 next year.
Lotte Engineering & Construction will reduce its debt by 1 trillion won and bring its debt ratio down to 187.7% by the end of this year. Its cash assets at the end of the year will be 1.3 trillion won and its debts will be 1.9 trillion won.
The government is aiming to reduce the size of contingent liabilities from 3.66 trillion won this year to 2.47 trillion won next year, and then increase it to 2 trillion won through guarantees from the Housing and Urban Guarantee Corporation (HUG) and other sources.
Contingent liabilities are special liabilities that are not currently recognized as liabilities but may become recognized as liabilities if an unexpected event occurs in the near future.
Lotte Shopping plans to significantly reduce its debt ratio by revaluing its assets worth 7.6 trillion won for the first time in 15 years.
At one point, the size of its assets increased from 3.1 trillion won to 6.7 trillion won, lowering its debt ratio from 102% to 87%.
Lotte Shopping also said that its e-commerce division is in the red,
The company's performance has shown signs of improving since last year, and it is expected to gain a foothold in turning a profit in 2026.