Lotte Group’s hotel unit will push ahead with its public initial offering as scheduled, despite projections of a possible plunge in market value from its recent failure to renew a license to run one of its duty-free stores, Lotte officials said Sunday.

Hotel Lotte plans to apply for preliminary reviews for a stock listing in December to float its shares on the main bourse Korea Exchange by February 2016.

“Irrespective of the result on the duty-free store license, Hotel Lotte will continue to make efforts for the February IPO as planned,” a Lotte spokesman said.

On Nov. 14, Hotel Lotte, which operates a Lotte Duty Free store, lost its license for its outlet at Lotte World Tower in the affluent Gangnam region while renewing a license for a store in Myeong-dong, a downtown shopping district.

Industry insiders said that losing the store could lead to reevaluation of the firm’s market value. Hotel Lotte said it is expected to have a market capitalization of around 10 trillion won ($8.5 billion) when it is publicly traded.

Revenue from the duty-free sector is expected to account for 85 percent, including 10 percent from the lost Lotte World Tower, of the hotel’s total sales this year, according to NH Investment & Securities.

The move reflects Lotte Group chairman Shin Dong-bin’s willingness to list the hotel unit after pledging to improve the group’s governance structure and transparency by offering its affiliates to go public.

The group came under pressure to enhance its transparency after a family feud between founder Shin Kyun-ho and his sons, Dong-joo and Dong-bin, exposed the conglomerate’s dark side such as its complex cross-shareholding structure.

“Hotel Lotte can be listed within two months if the company satisfies all the requirements to do so, but the Seoul bourse will thoroughly examine whether the firm is capable for stable management (amid the ongoing power struggle),” an official at the Korea Exchange said.

Hotel Lotte is 99 percent controlled by Japanese shareholders, including Tokyo-based Lotte Holdings and other unlisted Japanese companies.

By Park Han-na (hnpark@heraldcorp.com)