Lotte Chemical is reportedly considering the sale of its Malaysian subsidiary Lotte Chemical Titan (LC Titan).
According to industry sources on Mar. 6, Lotte Chemical is searching for potential buyers for LC Titan, including Korean and foreign petrochemical companies and large private equity funds (PEFs). The company is reportedly preparing to sell its entire stake (74.7 percent) in LC Titan which is traded on the Malaysian stock market.
According to sources in the investment banking (IB) industry, Lotte Chemical has been in contact with several IBs to select an advisor for the sale since last year. The problem is that it will not be easy to find a buyer of LC Titan listed on the Malaysian stock market as its stock price has dropped significantly since its listing and the company is even losing money.
LC Titan was launched in 2010 when Lotte Chemical acquired Malaysia’s largest petrochemical company, Titan Chemical. It was listed on the local bourse in 2017 with a market capitalization of about 4 trillion won. It has been in the red since the second quarter of 2022 and posted an annual operating loss of 61.2 billion won in 2023. As of Mar. 6, LC Titan’s market capitalization was 765.5 billion won, about half of the acquisition price of about 1.5 trillion won.