Lotte Chemical Completes Sale of 75% Stake in Pakistani Subsidiary LCPL

Divestment of Non-Core Assets and Strengthening Financial Stability
Accelerating Transition to a Specialty-Focused Business Structure

On November 12, Lotte Chemical announced that it had completed the sale of its 75.01% stake in its Pakistani subsidiary, Lotte Chemical Pakistan Limited (LCPL). This sale is part of the company’s business restructuring efforts to move away from a business structure centered on commodity products and to address management uncertainties in Pakistan. It is interpreted as a strategic decision to dispose of non-core assets and strengthen financial soundness.

LCPL is a company that produces 500,000 tons annually of purified terephthalic acid (PTA), which is used as a raw material for polyester fibers, industrial yarns, and PET bottles. The buyer is PTA Global Holding Ltd, a special purpose vehicle (SPV) jointly established by AsiaPak Investments Limited (API), a Pakistani private equity fund, and Montage Commodities FZCO, a petroleum and chemical trading company based in the United Arab Emirates.

This sale process began after the disclosure on February 19, and was finalized on November 12 with the completion of the stock tender offer in September, followed by the payment of the transaction amount and share exchange. The total sale price was 98 billion won. Including 29.6 billion won in dividends received over the past three years since June last year, Lotte Chemical secured a total of 127.6 billion won in funds.

The sale of Lotte Chemical’s stake in its Pakistani subsidiary LCPL is seen as a measure to dispose of non-core businesses, resolve management uncertainties, and strengthen financial soundness. LCPL is a company focused on commodity products, producing PTA (purified terephthalic acid), and faces significant volatility in profitability due to global oversupply. In addition, business risks increased due to macroeconomic instability in Pakistan, including sharp currency fluctuations, foreign exchange shortages, and International Monetary Fund (IMF) bailout programs.

Since 2023, Lotte Chemical has classified LCPL as a non-core business and has been seeking its sale. The company explained that this transaction would help resolve management uncertainties in Pakistan, such as bailout programs and currency fluctuations, and strengthen its financial soundness. A Lotte Chemical official stated, "We will continue to pursue business restructuring to focus on strengthening our fundamental competitiveness and will expand the proportion of specialty businesses, such as high-value-added materials and high-performance engineering plastics."

This content was produced with the assistance of AI translation services.