KUALA LUMPUR: Lotte Chemical Titan Holding Bhd (LCT) has provided clarification regarding recent speculations about Lotte Chemical Corp (LCC) considering various strategic measures related to the company.
In response to an article titled "Lotte puts Lotte Chemical Titan in Malaysia on the market," published by The Korea Economic Daily this week, LCT said that, upon thorough inquiry, LCC is indeed exploring various strategic options, but no decisions have been made thus far.
According to sources cited in the report, LCC is reportedly seeking potential buyers for LCT and has engaged with domestic and foreign companies, as well as global private equity firms, through investment banks.
It was also reported that the prospective deal is estimated at US$600 million.
LCC, South Korea's second-largest petrochemicals company, holds a 74.72 per cent stake in LCT, making it one of its significant overseas subsidiaries.
LCT is one of Southeast Asia's top petrochemical firms. It produces basic petrochemicals such as ethylene, polyethylene, and polypropylene in Malaysia and Indonesia.
In 2010, LCC acquired the entire business from Malaysia's The Chao Group, which held a 70 per cent stake, and Permodalan Nasional Bhd, which held a 30 per cent stake, for US$1.25 billion.
LCT listed on the local stock exchange in 2017 at a market value that was 2.5 times more than the acquisition price.
The company's shares experienced a decline of three sen, or 2.59 per cent, to RM1.13 on Thursday, resulting in a market capitalisation of RM2.61 billion.
Year-to-date, the stock has fallen by 19.29 per cent.
In the fiscal year 2023, LCT reported a widening net loss of RM780.29 million compared to RM731.06 million in the previous year.
Revenue also decreased by 23.68 per cent to RM7.65 billion from RM10.19 billion.
The company attributed this weaker performance to a decline in margin and a share of the loss from Lotte Chemical USA Corp.