Lotte Corporation to Cancel Treasury Shares Worth 166.3 Billion Won, Signaling Commitment to Value-Up

Lotte Corporation will cancel treasury shares worth about 160 billion won, strengthening its shareholder return policy. The move also aligns with recent amendments to the Commercial Act of the Republic of Korea that effectively mandate the cancellation of treasury shares.
According to industry sources on the 10th, Lotte Corporation announced in a regulatory filing on the 9th that it has decided to cancel 5,245,461 treasury shares. This represents about 5% of its common shares acquired as treasury stock through past spin-offs and mergers. Based on the closing price on the 6th, the planned cancellation is valued at approximately 166.3 billion won. The cancellation is scheduled for the 31st.
Once the treasury shares are cancelled, the total number of shares outstanding will decrease, but the company’s capital will remain unchanged. Since its launch as a pure holding company in 2017, Lotte Corporation has increased its treasury share holdings through a series of spin-offs and mergers involving key affiliates such as Lotte Confectionery, Lotte Shopping, Lotte Chilsung Beverage, and Lotte Wellfood. In response, the company has been gradually implementing plans to make use of its treasury stock. Last year, it sold 5% of its treasury shares to Lotte Property & Development to improve its financial structure and secure funds for new business investments, and it has been reviewing plans to sequentially sell about 15% of its treasury shares and cancel a portion of them.
The recent tightening of regulations on corporate use of treasury shares also appears to have influenced this decision. Amendments to the Commercial Act of the Republic of Korea recently passed by the National Assembly of the Republic of Korea require companies that acquire treasury shares to cancel them within one year. Treasury share cancellation is a method by which a company permanently removes its own shares from the market, reducing the number of shares in circulation. This can increase the value per share and is considered a key tool for returning profits to shareholders.