KARACHI: South Korean chemical company Lotte Chemical Corporation (LCC) on Monday announced that the company has approved the sale of all shares of its Pakistan unit to a local chemical company for $156 million.
The Seoul-based company, which was engaged in the production of purified terephthalic acid (PTA), decided to sell its Pakistani unit to get more funds and streamline its business, JEE News said.
LCC owns a 75% stake in Lotte Chemicals Pakistan Limited (LOTCHEM), which produces PTA used to make polyethylene terephthalate (PET) bottles and other polymer products, such as fibers, resins and thin films. The company’s Port Qasim plant can produce over 500,000 tonnes of PTA annually.
Lotte Chemical attributed the stake disposal to “business portfolio optimization”. A notice to the Pakistan Stock Exchange (PSX) read: “The Board of Directors of Lotte Chemical Corporation, South Korea (LCC Korea), the majority (75.01%) shareholder of LOTTE Chemicals Pakistan Limited, has approved and permitted the sale of LCC Korea holds all the shares of the company (i.e. 75.01%) for the optimization of LCC Korea’s business portfolio.
Lucky Core Industries (LCI), formerly ICI Pakistan Limited, will acquire 75.01% stake in LOTCHEM.
In a notice to the PSX, LCI said, “We have received confirmation from Lotte Chemical Corporation that their Board of Directors has approved the sale of approximately 75.01 per cent of the issues and paid up capital of Lotte Chemicals Pakistan Limited, which is comprising approximately Rs.1,135,860,105. ordinary shares of the Company.”
It added that the closing of the transaction is subject to the signing of the share purchase agreement and other transaction documents as well as the receipt of necessary approvals, including those of the company’s board of directors.
LCC will use the funds from the sale to strengthen its advanced materials division and further enter into sustainable chemical products, while continuing to sell existing products used as plastics feedstock, JEE News reported. will upgrade petrochemical products.
The sale of the Pakistani unit means that LCC will no longer be involved in the production of PTAs. It shut down a domestic PTA production line in Ulsan, 307 km to the southeast, in 2020. Lotte’s scrip was trading at Rs 28.2, up Rs 0.65 or 2.36 per cent, with 2.59 million shares traded on Monday.
