Lotte Chemical Titan Holding Bhd. (Kuala Lumpur, Malaysia), an affiliate of Lotte Chemical Corp. (Seoul, South Korea), has received an offer from a securities company and five special-purpose corporations set up by five securities companies to acquire Lotte Chemical Corp.’s 25% stake in Lotte Chemical Indonesia (LCI) for 650 billion South Korean won ($449.4 million). The identities of the buyers were not disclosed.
Following the sale of shares, Lotte Chemical Corp.’s ownership in LCI will be reduced from 49% to 24%. Lotte Chemical intends to use funds to improve its financial structure by repaying debt.
LCI was established in 2016. It plans to start up a new naphtha cracker and related benzene, toluene and xylene (BTX) plant at Cilegon, Indonesia, in May, a company source earlier told S&P Global Commodity Insights on Feb. 24.
The cracker will have capacity for 1 million metric tons per year of ethylene, 520,000 metric tons per year of propylene and 140,000 metric tons per year of butadiene.
“Benzene nameplate is 150,000 metric tons per year, toluene 50,000 metric tons per year and C8+ at 30,000 metric tons per year for [the BTX unit],” another company source earlier said to Commodity Insights.
The company has been selling its ownership in overseas subsidiaries to bolster its liquidity and plans to raise 1.4 trillion won.
Lotte Chemical last February sold its entire 75.01% stake in Lotte Chemical Pakistan Ltd. (LCPL) to AsiaPak Investments (Islamabad) and to Montage Oil (Dubai, United Arab Emirates), a commodity trading and logistics firm. LCPL has 500,000 metric tons per year of purified terephthalic acid capacity at Port Qasim.
In October of last year, Lotte Chemical signed a price-earning swap worth 660 billion won by selling its 40% stake in Lotte Chemical Louisiana LLC (LCLA). According to data from Commodity Insights, LCLA produces ethylene glycol with a capacity of 700,000 metric tons per year.
The company recently announced its decision to liquidate its joint venture Lotte Ube Synthetic Rubber Bhd. (LUSR; Pasir Gudang, Malaysia). LUSR was established in 2012 by Lotte Chemical and Ube Elastomer Co. as a 50/50 JV, and it produces polybutadiene rubber with a capacity of 72,000 metric tons per year.
Lotte Chemical last July announced plans to transform its portfolio by the end of the decade, de-emphasizing basic petrochemicals and increasing its focus on specialty chemicals.
by Kartik Kohli
Source: chemweek.com
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