Affinity Equity set to close $1.1 bn purchase of Lotte Rental

Affinity Equity Partners said on Friday that it will sign a definitive agreement on March 11 with Lotte Group to acquire a 56.2% stake in South Korea’s No. 1 car rental and leasing company Lotte Rental Co. for 1.57 trillion won ($1.1 billion).

It will purchase the shares from Hotel Lotte Co. and Hotel Lotte Pusan Co.

The acquisition price includes 211.9 billion won Affinity is set to inject to purchase new shares to be issued by Lotte Rental, to shore up the latter's financial strength.

The rights offering price is 29,180 won per share, similar to its Friday closing of 29,050 won.

In total, the deal is valued at about 2.5 times its market value.

Affinity said it will manage Lotte Rental as a separate entity from SK Rent-a-Car Co., the country’s No. 2 car leasing company.

Last year, the private equity firm bought SK Rent-a-Car for 820 billion won from SK Networks Co.

Write to Seok-Cheol Choi at dolsoi@hankyung.com

Yeonhee Kim edited this article.