LOTTE Global Logistics, the logistics subsidiary of LOTTE Group, has voluntarily withdrawn its intention to list on the Korea Securities Market (KOSPI).
LOTTE Global Logistics announced on the 2nd that it submitted a withdrawal report to the Financial Services Commission and temporarily postponed the initial public offering (IPO) process.
LOTTE Global Logistics explained, "Considering factors such as the growing uncertainty in the domestic and international financial market and the difficulty of properly evaluating the company's value, we canceled the remaining schedule and submitted the withdrawal report."
LOTTE Global Logistics, which aimed to go public this month, conducted demand forecasting for institutional investors from the 24th to the 30th of last month. Based on this result, it was scheduled to conduct a general subscription on the 12th and 13th. Samsung Securities and Korea Investment & Securities are the lead underwriters, while KB Securities acts as the co-underwriter. LOTTE Global Logistics was established in March 2019 through the merger of LOTTE Logistics and LOTTE Global Logistics (formerly Hyundai Logistics).
LOTTE Global Logistics presented a hoped-for offering price range of 11,500 to 13,500 won, and the expected market capitalization after listing is approximately 478.9 billion to 562.2 billion won. The planned amount of the offering, based on the upper end of the range, is 201.7 billion won, with a 50% share of new shares and existing shares for sale. The company planned to use the funds raised from this offering to expand its delivery infrastructure and enhance its smart logistics systems.
However, it has been reported that the anticipated offering price from the demand forecasting conducted from the 24th to the 30th of last month fell below the hoped-for price. It was also noted that the participation of foreign investors was low.
The public offering of LOTTE Global Logistics has been criticized for having several unfavorable factors for a successful launch. The strong exit purpose of financial investors (FIs) and the fact that the parent company is already listed contribute to the inability to avoid discussions of duplicate listings. There is also a precedent where other listed subsidiaries, such as Lotte Shopping and LOTTE Rental (currently sold), had poor stock prices at the time of their public offering.
Previously, another major initial public offering (IPO) candidate, DN Solutions, also withdrew its listing plan due to poor demand forecasting. DN Solutions, a global leader in the machine tool sector ranked third, set a hoped-for offering price range of 65,000 to 89,700 won, targeting a market capitalization of over 5.6 trillion won. The size of the offering was expected to exceed 1.5 trillion won, marking it as a 'trillion-unit giant.' However, it has been reported that foreign investors' participation was low during the demand forecasting.