South Korea’s retail and food giant Lotte Group unloaded its entire stake in Burger King Japan Holdings Co. to Hong Kong-based private equity fund Affinity Equity Partners (AEP), which also owns Burger King Korea, amid falling sales, according to Financial Supervisory Service on Sunday.

The group’s holding entity Lotte Corp. in the second quarter sold off its entire stake in Burger King Japan for about 10 billion won ($8.26 million) to Affinity Equity Partners (AEP), Hong Kong-based buyout fund that is also the largest shareholder of Burger King Korea, according to sources.

Lotte GRS Co., the processed food distribution unit operating another burger chain Lotte Ria, took over Burger King Japan in 2010 with its 20 billion won worth debts but failed to restore the profitability of the fast food chain that has been losing out to other rivals including local brand Mos Burger in Japan. After recording annual losses over 10 billion won since 2011, Lotte finally decided to abandon Burger King in April. Total assets of Burger King Japan were estimated at 37.5 billion won, sources found.

Upon the completion of the stake sale, liquidation process for Burger King Japan Holdings is expected to begin soon, according to sources. The Hong Kong-based private equity fund reportedly plans to triple the number of Burger King stores to more than 300 across Japan by 2022 by investing 5 billion yen.

The burger brand in Korea under the same ownership has been recording sound performance. BKR Corp. entrusted with the operating right of Burger King Korea by the Hong Kong-based buyout fund posted more than 9 billion won in operating profit in 2018, surging six times than the previous year, with sales up 16 percent to 402.7 billion won. The number of stores across the nation has also been on a steady increase after exceeding 300 in 2017 to 340 in 2018 and 360 as of August this year.

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