Korea’s Lotte Chemical revives plan to sell its Bursa-listed subsidiary

Lotte Chemical Corp is set to resume its plan to divest its Malaysian and Indonesian subsidiaries, Lotte Chemical Titan Holding Bhd and a stake in its Indonesian unit. The South Korean petrochemical giant had previously halted these sale processes following the US-Iran war earlier this year. According to the Korea Economic Daily, the company is now reviewing market conditions and searching for potential buyers, with the loss-making Malaysian unit being the primary target for sale.

Discussions are also underway with Indonesia's sovereign wealth fund, Danantara, for a partial divestment of the Indonesian subsidiary. This move comes as the global petrochemical industry faces challenges, including a capacity surplus. In March 2024, Lotte Chemical was reportedly seeking buyers for its Malaysian subsidiary, LCTitan, with an estimated deal value of US$600 million.

Lotte Chemical holds a 75% stake in LCTitan, a leading integrated producer of olefins and polyolefins in Southeast Asia, with 12 plants in Johor. The Korean firm acquired LCTitan from Malaysia's The Chao Group and Permodalan Nasional Bhd for US$1.25 billion in 2010. Despite persistent losses, LCTitan's share price has plummeted by over 90%, trading at just 31 sen and valuing the company at RM716.8 million.