Lotte Chemical Faces $1.8 Trillion Loss and Sells Pakistan Unit for $68 Million

Lotte Chemical Corp., a struggling South Korean chemical company, announced on Wednesday that it has divested its affiliate in Pakistan as part of a broader business reorganization strategy. The company sold its entire 75.01% stake in Lotte Chemical Pakistan Ltd. (LCPL) to a consortium of AsiaPak Investments Ltd. and Montage Oil DMCC for 97.9 billion won (approximately $68 million).

This sale comes in the wake of significant financial challenges, as Lotte Chemical's profitability has plummeted due to a downturn in the petrochemical sector. The company has managed to secure 127.5 billion won through the sale of non-core assets and by receiving unpaid shareholding gains from LCPL for the period between 2022 and 2024.

Lotte Chemical initially acquired its stake in the Pakistani purified terephthalic acid (PTA) company back in September 2009 for 14.7 billion won as part of its expansion strategy. However, the company now finds itself in a precarious financial situation, with net losses soaring to an alarming 1.8 trillion won in 2024, compared to a mere 39.2 billion won the previous year.

Operating losses have also widened significantly, increasing to 894.7 billion won from 547 billion won during the same period, while sales saw a slight rise of 2.4% year-on-year, reaching 20.4 trillion won.

With these ongoing financial struggles, Lotte Chemical's focus on restructuring and divesting non-core assets appears essential for its survival in a challenging market.