outh Korean multinational Lotte Chemical Corporation has agreed to sell its entire 75.01% stake, the single largest one in Lotte Chemical Pakistan (LOTCHEM) to Lucky Core Industries (LCI). The deal will cost $156 million, approximately 192.4 billion South Korean Won (KRW).
Lotte Chemical Corporation is the parent company of LOTCHEM Pakistan and holds 75.01% shareholding in the subsidiary. This entire shareholding is being sold to Lucky Core Industries (LCI).
The announcement was first made by the chemical giant, and subsequently announced to the Pakistan Stock Exchange (PSX) by LOTCHEM and LCI on Monday.
The notice by LOTCHEM Pakistan read, “The Board of Directors (BoD) of Lotte Chemical Corporation, South Korea (“LCC Korea”), the majority (75.01%) shareholder of Lotte Chemical Pakistan Limited (“Company”) has approved and authorised the sale of all of the company’s shares held by LCC Korea (i.e. 75.01%) for the purpose of optimisation of LCC Korea’s business portfolio, subject to execution of a share purchase agreement (“Proposed divestment”).”
The completion of the deal will be subject to the required approvals and regulations. According to the announcement made by Lotte Korea, the sales and purchase agreement (SPA) will be signed on January 26. Curiously, however, the date of the SPA has not been disclosed by either LOTCHEM or LCI.
LCI, in their notification to the PSX, also announced that they have received confirmation from the BoD of Lotte Chemical Corporation about their approval for the sale of shares (1,135,860,105 shares), which will be subject to signing of share purchase agreement and other transactionary approvals.
However, previously LCI was not the only company in the race for the acquisition. Just last week, Novatex (Private) Limited, a local company, withdrew its offer to acquire the 75.01% shareholding in LOTCHEM because the parties were unable to agree on the terms of the transaction. This paved the way for LCI to acquire the chemical company.
The LCI, formerly known as ICI Pakistan Holding Limited (ICI) until December 23, 2022, made the public announcement to acquire 75.01% shareholding of LOTCHEM last year on July 22 through their manager of the offer, Optimus Capital Management (Private) Limited. On October 7, 2022, the BoD of LCI authorised the company to submit a binding bid for the acquisition. Lucky Cement Limited is the parent company of LCI.
