"Lotte Group Will Decompose in the Air Next Month" Rumors of Employee Reduction in Bankruptcy '[Y Record]

Rumors spread recently that 'Lotte Group is on the verge of aerial decomposition'
Lotte Group Announces "Founded" Explanation...Legal Response Review
"Background of declining profitability of Lotte Chemical, the core of the group"

■ Host: Anchor Chung Chae-woon and Anchor Kim Jung-jin
■ Starring: Lee In-cheol, Director of the Institute for Good Economics


* The text below may differ from the actual broadcast content, so please check the broadcast for more accurate information. Please specify [YTN Newswide] when quoting.

◇Anchor> This time, let's talk about companies. Lotte Group, ranked sixth in the business world, recently faced a serious liquidity crisis, and it was noisy. The group says there is no liquidity problem, but there seems to be talk of selling department store stores. What do you think about this background?

◆Lee In-cheol> That's right. Recently, through information from unknown YouTuber sources, the so-called Girasi, Lotte Group will be in a liquidity crisis early next month and will be publicized like the second Daewoo Group. Rumor has it that it will go bankrupt. It's quite leaps and bounds, and at first glance, I don't understand, but the content was quite specific. Lotte Group's profits are 39 trillion won, the fourth largest in the world. The group's short-term net income this year is only 1 trillion won, which is less capable of repaying. It contains information that more than half of the employees will be cut, mainly by distribution affiliates.

The day after the news broke, the stock market was in turmoil. The stock price of Lotte Group's major affiliates fell more than 5-10% in one day, hitting a new 52-week low during the day. Even though Lotte Group said it was groundless and that it would punish the rumors strongly in the first place, it did not prevent the stock price from falling. From an investor's point of view, would there be smoke in the chimney? In fact, the petrochemical and distribution sector, which is called Lotte Group's main business recently. It is true that the department stores, marts, and duty-free shops you mentioned are struggling considerably.

In the case of Lotte Chemical called Cash Cow, it has brought operating profit of more than KRW 1 trillion every year, but the cumulative deficit reached 660 billion until the last three quarters of this year. The chemical industry is increasingly seeing its performance deteriorate due to oversupply and low-cost Chinese products. In addition, as Lotte Engineering & Construction was in a liquidity crisis due to poor PF, Lotte Chemical has even supported its affiliates by providing payment guarantees. In terms of online business, Lotte On has been a little late in launching its business in 2020.Ma's cumulative deficit exceeded 500 billion won by the first half of this year. After all, Lotte Group has more than 71 trillion won in real estate and cash assets combined. We are trying to evolve a liquidity crisis. Of course, the fact that Lotte Group is disintegrated in the air like Daewoo Group is overly exaggerated. However, the structural problems behind the rumor, the stagnation in the main business of chemistry and distribution, and the debt management. It doesn't seem easy to fully restore investor confidence unless fundamental solutions follow.

Excerpted from
: Lee Mi-young, editor of the digital news team

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