Tuesday Jan 17, 2023
KARACHI: South Korean chemical giant Lotte Chemical Corporation (LCC) announced on Monday that the company had approved the sale of its Pakistan unit's entire shares to a local chemical company for $156 million, reported The News citing a Korean news agency.
The publication reported that the Seoul-based company that was engaged in the production of purified terephthalic acid (PTA) decided to sell the Pakistani unit to secure more funds and streamline its business.
LCC owns a 75% stake in Lotte Chemical Pakistan Limited (LOTCHEM), which produces PTA used to make polyethene terephthalate (PET) bottles and other polymer products, such as fibres, resins and thin films. The company's Port Qasim plant can produce over 500,000 tonnes of PTA annually.
Lotte Chemical cited "optimisation of business portfolio" as the reason for the disposal of shares. A notice to the Pakistan Stock Exchange (PSX) read: “The Board of Directors of the Lotte Chemical Corporation, South Korea (LCC Korea), the majority (75.01%) shareholder of LOTTE Chemical Pakistan Limited, has approved and authorized the sale of all of the company’s shares held by LCC Korea (i.e., 75.01%) for the optimisation of LCC Korea’s business portfolio.”
Lucky Core Industries (LCI), previously ICI Pakistan Limited, will take over the 75.01% stake in LOTCHEM.
In a notice to the PSX, the LCI informed, “We have received confirmation from Lotte Chemical Corporation that their board of directors has approved the sale of approximately 75.01% of the issues and paid up capital of Lotte Chemical Pakistan Limited, comprising approximately of 1,135,860,105 ordinary shares of the company.”
It added that the culmination of the transaction is subject to the signing of the share purchase agreement and other transactional documents, along with receipt of necessary approvals, including the company’s board of directors.
The Korean news agency reported that LCC would use the funds from the sale to bolster its advanced materials segment and make further inroads into sustainable chemical products while upgrading the existing petrochemical products used as feedstock for plastics.
The sale of the Pakistani unit means that LCC will no longer engage in PTA production. It shut down the domestic PTA production line in Ulsan, 307 kilometres southeast, in 2020. Lotte’s scrip at the bourse was traded at Rs28.2, up by Rs0.65 or 2.36%, with a turnover of 2.59 million shares on Monday.