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Photo = Lotte Chemical |
[Alpha Biz= Kim Jisun] Lotte Chemical has signed a Price Return Swap (PRS) agreement on a portion of its Indonesian subsidiary shares, raising 650 billion KRW in cash to improve its financial structure amid a downturn in the petrochemical industry.
On Thursday Lotte Chemical announced that it would enter into a PRS contract for 25% of its 49% stake in its Indonesian subsidiary, LCI. PRS is a financial derivative used for capital financing, where the parties settle the price difference based on whether the stock price is higher or lower than the predetermined base price at maturity.
LCI was established in 2016 to build a 1-million-ton ethylene production plant in Indonesia. Lotte Chemical plans to use the funds to repay debt and strengthen its financial position.
This is not Lotte Chemical’s first PRS deal. In October 2024, the company secured 660 billion KRW by leveraging a 40% stake in its U.S. ethylene glycol (EG) subsidiary, LCLA. With the latest funding from the LCI stake, Lotte Chemical has now raised a total of 1.3 trillion KRW through PRS agreements.
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
