LOTTE Chemical announced on the 19th that it has signed a stock purchase agreement to sell its non-core business entity in Pakistan to enhance its portfolio transition and improve financial soundness. The company secured a total of 1.275 billion won by receiving the sale price of 979 million won and the unpaid dividends from 2022 to 2024 from the entity.
On the same day, LOTTE Chemical held a board meeting and announced that it would sell its entire 75.01% equity stake in its subsidiary LCPL (LOTTE Chemical Pakistan Limited), which produces and sells purified terephthalic acid (PTA), to the Pakistan-based private equity investment company API (AsiaPak Investments Limited) and the United Arab Emirates oil distribution company Montage Oil DMCC.
LOTTE Chemical plans to conclude the transaction within the first half of the year to secure approximately 979 million won and escape the risks of economic aid and exchange rate volatility in Pakistan. Additionally, the company has also completed the collection of the unpaid dividends amounting to around 296 million won that it couldn't receive due to the local central bank's prohibition on foreign currency remittances, thus improving cash flow while simultaneously working to enhance its financial soundness.
The LCPL (LOTTE Chemical Pakistan Limited) being sold this time is a company that LOTTE Chemical acquired for approximately 14.7 billion won in 2009. Despite difficulties such as global economic instability, it recorded a revenue of 532 billion won and an operating profit of 19.8 billion won last year.
LOTTE Chemical determined that selling LCPL to the Pakistani chemical company did not align with its mid- to long-term vision of 'expanding high value-added specialties' in 2023 and entered into a contract. However, the contract was canceled due to delays in approval from local competition authorities for the corporate merger.
The company plans to focus more on asset-light strategies for non-core assets through this contract, aiming to secure structural competitiveness and efficiency.
Lee Young-jun, CEO of LOTTE Group's chemical division, noted, 'We will accelerate the ongoing business structure transition and maintain a cash flow-centric management environment' and added that 'we will implement an effective and visible business transformation.'