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Lotte Chemical Pakistan Limited (LOTCHEM) said on today that it will sell its subsidiary in Pakistan to a local chemical company for 192.4 billion won (US$156 million) as part of its efforts to restructure its operations with an emphasis on sophisticated materials and environmentally friendly goods.
The company issued a notice to PSX earlier today stating, “The board of the Lotte Chemical Corporation, South Korea (LCC Korea), the majority 75.01% shareholder of LOTCHEM has approved and authorised the sale of all of the company’s shares held by LCC Korea that is 75.01% for the purpose of the optimization of LCC Korea’s business portfolio.”
According to an international news source, “Lucky Core Industries, a Pakistani chemical company, will take over the entire 75.01% stake in LOTCHEM, a unit that mainly engages in the production of purified terephthalic acid (PTA)”.
“A Share Purchase Agreement (SPA) will be executed on such terms and conditions as may be specified, under the share purchase agreement.” the article added. and stated that the completion of the Proposed Disposal is contingent upon obtaining all governmental and corporate approvals as may be required.
PTA is utilised extensively in the production of Polyethylene terephthalate (PET) bottles and other polymer products, including fibres, resins, and thin films.
In addition, LOTCHEM will use the proceeds from the transaction to boost its innovative materials division, make additional advances into sustainable chemical goods, and upgrade existing petrochemical products used as plastics feedstock.
The sale of the Pakistani unit signifies that LOTCHEM will no longer produce PTAs. It highlighted that it will shut down the domestic PTA production plant in Ulsan, 307 kilometres to the southeast, in 2020.
