MEDIA: Lotte Chemical weighs disposal options for loss-making Malaysian subsidiary, LC Titan
South Korean chemical giant Lotte Chemical Corp (LC Corp) is contemplating divesting its shares in the struggling Malaysian subsidiary, Lotte Chemical Titan Holding Berhad (LC Titan).
South Korean chemical giant Lotte Chemical Corp (LC Corp) is contemplating divesting its shares in the struggling Malaysian subsidiary, Lotte Chemical Titan Holding Berhad (LC Titan). LC Corp faces pressure from LC Titan's consistent quarterly losses, exacerbated by volatile feedstock costs and sluggish demand.
Despite LC Titan's narrowing net loss of RM186.48 million in the fourth quarter of 2023, analysts anticipate further losses in subsequent quarters, particularly in the first quarter of 2024. In response, LC Corp has reportedly initiated the sale process, prompting LC Titan to disclose considerations of "strategic measures" to Bursa Malaysia on 07 March.
However, finding a suitable buyer poses a challenge amid the oversupply and margin-constrained petrochemical industry. Analysts suggest that potential buyers would likely be integrated petroleum companies with upstream operations to mitigate feedstock costs, indicating a complex path ahead for LC Corp in divesting its Malaysian subsidiary.