Lotte Shopping, the country’s largest retailer, on Friday withdrew its plan to sell 18 retail properties to foreign investors.

Instead, it will sell seven of them to KB Asset Management for 600 billion won ($586 million).

According to industry insiders, Lotte and KB signed an optional contract on May 16 regarding the sales of Lotte department stores in Ilsan and Sangin-dong, Daegu; and Lotte Mart discount stores in Bupyeong, Pyeongtaek and Goyang in Gyeonggi Province as well as Gumi in North Gyeongsang Province and Dangjin, South Chungcheong Province.

KB will create a public offering fund by the end of June with plans to run the stores for the next 10 years. “We are planning to consult with the Financial Supervisory Service, too,” a KB official said.

Still, Lotte will take over the store operation through “sale and lease back” deals. The seven stores marked a total of 1 trillion won in sales last year.

The deal implies that Lotte has stepped back from its February plan to sell 18 stores to foreign investors through the Singapore Exchange. If accomplished, it would have been the largest overseas initial public offering by a Korean company to date.

However, Moody’s depreciation of Lotte Shopping’s credit in the same month due to its heavy debt as well as the sluggish global stock market has resulted in the change of plans, sources said.

A Lotte spokesperson said the company has not yet decided on the future of its 11 remaining stores.

By Bae Ji-sook (baejisook@heraldcorp.com)