Settings

ⓕ font-size

  • -2
  • -1
  • 0
  • +1
  • +2

JKL, MBK start taking control of former Lotte units

  • Facebook share button
  • Twitter share button
  • Kakao share button
  • Mail share button
  • Link share button
Lotte Insurance CEO Choi Won-jin
Lotte Insurance CEO Choi Won-jin
Credit ratings of insurer, card issuer downgraded after acquisitions by PEFs

By Park Jae-hyuk

Private equity firms (PEFs) that finalized their acquisition of Lotte's insurance and credit card units have begun replacing the two financial companies' board members with their own executives, indicating the beginning of new management systems.

Lotte Insurance, which was sold to JKL Partners, announced Oct. 10 it appointed JKL senior managing director Choi Won-jin as the new head of the insurance company.

Choi, a former finance ministry official who is also admitted to the New York Bar, joined JKL in 2015.

Tasked with an urgent paid-in capital increase for Lotte Insurance's financial soundness, the new CEO promised at his Oct. 11 welcoming ceremony that he will focus on responsible management for continuous growth of the insurer's enterprise value.

According to Lotte Insurance, another JKL senior managing director Kang Min-kyun was also appointed as the insurer's non-executive director at its Oct. 10 board meeting.

Korea Enterprises Federation honorary chairman Park Byung-won, former Financial Services Commission Chairman Shin Je-yoon and Kookmin University professor Yun Jeong-sun were appointed as outside directors of Lotte Insurance.

MBK Partners, which purchased Lotte Card, allowed its CEO Kim Chang-kwon to stay in office.

Asia's largest PEF, however, reshuffled the card issuer's board members at an extraordinary general meeting of shareholders Oct. 10.

Kim Kwang-il and Lee Jin-ha, both of whom are partners of MBK, were among the new non-executive directors of Lotte Card.

The CEO and new directors are facing the task of resolving conflicts with Lotte Card's union, in addition to its basic goal of enhancing the card firm's enterprise value.

The Lotte Card union has feuded with management over job security and compensation.

Meanwhile, domestic credit rating agencies cut credit ratings of the insurer and card issuer, saying they are no longer able to get financial support from Lotte Group since the PEFs' acquisitions.

NICE Investors Service downgraded Lotte Insurance's bond rating to A- from A0, and Korea Investors Service slashed Lotte Card's bond rating to AA- from AA.


Park Jae-hyuk pjh@koreatimes.co.kr


X
CLOSE

Top 10 Stories

go top LETTER