H Private Equity has exercised a put option worth 378.9 billion won ($267 million) against Lotte Group after the conglomerate’s repeated failures to list its logistics arm on Korea’s stock exchange.
The decision marks the first major instance of financial investors triggering such rights due to an IPO failure in South Korea. H PE, which invested in Lotte Global Logistics in 2017 and became its second-largest shareholder with a 21.87% stake, secured contractual protections that are now paying off handsomely. The put option’s exercise price of 50,720 won per share stands at nearly four times the 11,500-13,500 won range the company had hoped to achieve in its abandoned public offering.
For Lotte Group, the payment comes at a challenging time. The conglomerate’s net debt exceeded 40 trillion won ($28.2 billion) at the end of last year, and this cash outflow adds significant pressure to its balance sheet. The logistics unit’s IPO has been postponed multiple times since 2017, with each delay resulting in more favorable terms for H PE, including higher guaranteed returns.
Industry experts suggest this case could reshape how Korean companies structure deals with financial investors. “This is a watershed moment for IPO-contingent investments,” said an investment banking source familiar with the matter. “Companies with similar arrangements will face heightened scrutiny.”
The repercussions may extend to other firms like K Bank, which has a similar deal with investors including Bain Capital that allows for put options if an IPO isn’t completed by July 2026.
