Lotte Card seeks to sell transportation card subsidiary

South Korea’s credit card company Lotte Card Co. is slated to sell its subsidiary Loca Mobility Corp., the second-largest public transportation card operator in the country, sources familiar with the matter said on Sept. 23.

MBK Partners Ltd., a North Asia-focused private equity firm and the largest shareholder of Lotte Card, is in exclusive talks with some potential buyers for the sale of Loca Mobility, sources added.

The PE firm is planning to sell a 100% stake in Loca Mobility, expected to reach 200 billion won ($140.5 million). 

MBK Partners has put a 59.38% stake in Lotte Card on the market, targeting a sales price of more than 3 trillion won, and drew preliminary bids from Korea’s Hana Financial Group earlier this month. The PE firm and Woori Financial Group purchased the majority stake for 1.38 trillion won in 2019. 

Divestment of the transportation card subsidiary will affect the sales price of parent Lotte Card, market watchers said.

Loca Mobility posted 164.1 trillion won in revenue, 8.1% of parent Lotte Card’s total revenue, and 9.9 billion won in net profit last year. The company's earnings come from its public transportation card Cashbee and from installing card payment terminals in vehicles.

Lotte Card acquired transportation card company EB Card for 150 billion won in 2020, which was rebranded to Loca Mobility in April 2021. 

Loca Mobility operates a nationwide transportation card service infrastructure via its subsidiary Mybi Corp., which owns controlling stakes in Busan Hanaro Card Corp. and Hanpaysys Company. The two firms respectively operate transportation card services in Busan and Jeolla Province.

Write to Si-Eun Park at seeker@hankyung.com
Jihyun Kim edited this article.