Business

Lotte Chemical set to sell Pakistan unit for $156 million

Sell Pakistan unit for $156 million
Lotte Chemical set to sell Pakistan unit for $156 million
Karachi: Lotte Chemical Corporation (LCC), a significant South Korean chemical manufacturer, is about to sell its subsidiary. It announced its location in Pakistan on Monday. The transfer of its whole shares to a local chemical company had been approved.
LCC wants to grow its advanced materials division and will use the sales earnings for this purpose. Both updating current items and working toward environmentally friendly chemical products. According to a Korean news outlet, these are used as plastic feedstock.

LCC has a stake of 75 percent in Lotte Chemical Pakistan Limited (LOTCHEM). It is involved in the manufacturing of PTA which is extensively utilized to create polyethylene Terephthalate (PET) bottles as well as other polymer products like resins, fibers, and films that are thin. The company is able to produce more than 500 000 tonnes of PTA every year from its facility situated in Port Qasim, Karachi.

Lotte Chemical said the purpose of selling shares was to optimize its portfolio of business. “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 purpose of the optimization of LCC Korea’s business portfolio,” an announcement sent to Pakistan Stock Exchange (PSX) reads.

The finalization of the proposed divestment will depend on the acquisition of all relevant corporate and regulatory approvals as required, it added. Lucky Core Industries (LCI) which was which was previously ICI Pakistan Limited, will acquire the complete 75.01 percent stake in LOTCHEM.

“Lotte Chemical Corporation has given us confirmation. that their board of directors has authorized. The sale of about 75.01% of Lotte Chemical Pakistan Limited’s issued and paid-up capital. Or around 1,135,860,105 of the company’s common shares, “LCI made a statement in a letter to PSX.

The acceptance of the purchase contract still needs to be granted before the deal can be finalized. In addition to other papers pertaining to the deal between the parties, it also requires getting all required permissions. Additionally, the study mentioned the company’s board of directors.

The sales earnings will be put to use by LCC to grow and strengthen its advanced materials business. It strives to develop chemical products that are sustainable as well as to improve current products. These, according to the Korean news agency, are utilized as plastic feedstock.

The disposal of the Pakistani unit signifies that LCC will no longer participate in PTA production. The company will shut down its local PTA manufacturing line at Ulsan 307 km to the southeast in 2020. Lotte’s scrip in the bourse was trading at Rs28.2 and was up Rs0.65 (or 2.36 percent, and had an average turnover of 2.59 million shares on Monday.

Novatex Limited had, however, expressed interest in buying LCC shares earlier. According to a bourse notification made this week, the transaction could not be completed.

 

 

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