KOSDAQ-listed 09WOMEN, which was acquired by Singapore-based private equity fund (PEF) manager CCG Investment (CCGI), lent a large sum of money to Kim Han-jun, CEO of Lotte Tour Development. Because it is somewhat unusual for a listed company to provide monetary lending to the individual head of another listed company, multiple interpretations are emerging about the background. Some analysts say the lending was intended to support succession at Lotte Tour Development.
According to the Financial Supervisory Service's electronic disclosure system on the 17th, 09WOMEN decided on the 15th to extend monetary lending of 25 billion won to Kim Han-jun, CEO of Lotte Tour Development. The amount is equivalent to 70% of its roughly 35 billion won in cash on hand as of the first quarter, and the interest rate is 4.9%. As collateral, about 1.7 million shares of Lotte Tour Development were provided.
Industry watchers say 09WOMEN's lending was intended to help cover Lotte Tour Development's succession expense. Under Chairman Kim Ki-byung, Lotte Tour Development is in the process of handing control to his second son, CEO Kim Han-jun. In Jan., Chairman Kim Ki-byung gifted 6.1 million shares (7.67%) of Lotte Tour Development, and CEO Kim Han-jun now holds about 20% equity in Lotte Tour Development, making him the largest shareholder.
However, CEO Kim Han-jun still faces a gift tax burden estimated at several tens of billions of won. In practice, the Lotte Tour Development owner family chose a burdensome gift method—accepting both assets and debt—to reduce gift taxes in the succession process. Under this method, gift tax is levied only on the portion of the gifted assets excluding debt, allowing CEO Kim Han-jun to sharply reduce gift tax. About half of CEO Kim Han-jun's current equity in Lotte Tour Development was gifted under this approach.
The equity that CEO Kim Han-jun received through a burdensome gift is subject to a repurchase-option stock sale agreement with Equities First Holdings Korea. A repurchase-option stock sale agreement means that after selling shares, there is an option to buy them back under certain conditions. While actual ownership of the shares passes to the buyer, the seller can still exercise rights attached to the shares, such as voting rights, because the seller may buy them back under the contract terms.
Ultimately, to complete CEO Kim Han-jun's full succession, there remains an expense burden because the debt on the gifted shares must be repaid. The repurchase-option stock sale agreement on CEO Kim Han-jun's current equity in Lotte Tour Development amounts to about 87.3 billion won.
An investment banking (IB) industry source said, "To wrap up the succession, more than 100 billion won will likely be needed over the long term," adding, "09WOMEN's lending is seen as support for that."
The backdrop for 09WOMEN stepping in to support Lotte Tour Development's succession includes the companies' past ties with CCGI, 09WOMEN's largest shareholder. On the 1st of this month, CCGI acquired management control of 09WOMEN through special purpose company (SPC) CCG Monument Holdings.
CCGI has provided funding for Lotte Tour Development's Jeju Dream Tower project, which the company has focused on recently. In Jan. 2021, it played the role of a solid white knight by purchasing the 7-2 tranche of convertible bonds (CBs) worth 57.2 billion won to secure operating funds for the Jeju Dream Tower integrated resort and, later that year, investing in the 8-1 tranche worth 10 billion won.
Conversely, Chairman Kim Ki-byung has also supported CCGI. Dongwha Investment Development, an affiliate of Lotte Tour Development in which Chairman Kim Ki-byung is the largest shareholder, bought part of the 7-2 tranche CBs held by CCGI in 2024. The purchase price equaled the conversion price of 13,250 won, which, given that the stock was trading in the 9,000-won range at the time, meant taking the paper at a 35% premium to the market. This was when Lotte Tour Development's Jeju project was progressing smoothly but its stock was struggling due to financial burdens.
An industry source said, "The relationship between the two companies appears to have played a significant role in this lending," adding, "There is ample possibility that CCGI will provide additional support during the remaining succession process."