South Korean retail giant Lotte Group said Friday that it has picked Affinity Equity Partners, the Hong Kong-based private equity firm, as the preferred bidder to acquire its rental car business, Lotte Rental, in a 1.6 trillion won ($1.12 billion) deal.

The deal involves a combined 56.2 percent stake in Lotte Rental owned by its hotel subsidiaries, Hotel Lotte and Busan Lotte Hotel.

The latest deal comes amid growing concerns over a potential liquidity crisis at the nation’s sixth-largest conglomerate.

Proceeds from the sale will be used to repay debts incurred by the group’s hotel businesses, as well as to fund global expansion efforts and enhance the Lotte brand internationally, the group said.

“Since the rental business does not align with the group’s growth strategy, we decided to proceed with the sale,” a Lotte official said. “Looking ahead, Lotte plans to foster the mobility sector, one of its four new growth engines, focusing on technology-driven businesses such as electric vehicle charging and autonomous driving.”

Affinity Equity Partners plans to operate Lotte Rental as a separate entity from SK Rent-a-Car, which it acquired in August. The company said it will continue using the Lotte brand for the next three years and commit to ensuring job security for employees.