Lotte Chemical Accelerates Business Portfolio Shift... Sells Non-Core Overseas Operations
Sale of PTA Subsidiary in Pakistan
Securing 127.5 Billion KRW Through Dividend Collection and Asset Sale
Focusing on Enhancing Business Competitiveness and Improving Cash Flow
Lotte Chemical has signed a stock purchase agreement to sell non-core overseas businesses in order to shift its portfolio and enhance financial soundness.
On the 19th, Lotte Chemical held a board meeting and announced that it would sell its entire 75.01% stake in Lotte Chemical Pakistan Limited (LCPL), a PTA (Purified Terephthalic Acid) production and sales subsidiary located in Pakistan, to Asia Park Investment (API), a Pakistan-based private equity investment firm, and Montaj Oil DMCC, a UAE oil distribution company.
LCPL was acquired by Lotte Chemical in 2009 for approximately 14.7 billion KRW, and despite global economic uncertainties, it recorded sales of 532 billion KRW and an operating profit of 19.8 billion KRW in 2024.
Lotte Chemical plans to complete the transaction within the first half of this year to secure about 97.9 billion KRW, thereby mitigating risks related to Pakistan’s bailout and exchange rate volatility. Additionally, the company received approximately 29.6 billion KRW in unpaid dividends from 2022 to 2024 last June, which had been withheld due to the local central bank’s foreign currency remittance ban, improving cash flow and enhancing financial soundness.
In 2023, Lotte Chemical had signed a contract to sell LCPL to a Pakistani chemical company, judging that LCPL did not align with its mid-to-long-term vision of expanding high value-added specialties; however, the contract was terminated due to delays in corporate merger approval by local competition authorities. Nevertheless, with this recent agreement, the company plans to focus more on streamlining non-core assets to secure structural competitiveness and efficiency.
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Lee Young-jun, Head of Lotte Group’s Chemical Division, stated, “We will accelerate the ongoing business structure transformation and continue to maintain a cash flow-centered management environment,” adding, “We will implement effective and visible business innovations.”
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