Lotte Chemical Corp. agreed to sell its Pakistan-based purified terephthalic acid business to a consortium of Middle Eastern investors, marking another step in the South Korean company’s strategy to streamline operations.
The Seoul-based petrochemical manufacturer will divest its 75.01% stake in Lotte Chemical Pakistan Ltd. to API, a Pakistani private equity firm, and Montage Oil DMCC, a UAE-based oil trading company, for 97.9 billion won ($75 million).
The deal, expected to close in the first half of 2024, comes after a previous attempt to sell the unit fell through last year due to delayed regulatory approvals. The divestment aligns with Lotte Chemical’s shift away from basic chemicals toward higher-margin specialty products.
The Pakistani unit, acquired in 2009 for about 14.7 billion won, remained profitable despite challenging market conditions, generating revenue of 532 billion won and operating profit of 19.8 billion won last year. However, the business faced headwinds from Pakistan’s economic instability and currency volatility.
Lotte Chemical CEO Young-joon Lee indicated the company will accelerate its ongoing business transformation while maintaining cash flow-focused management. The transaction brings total proceeds to 127.5 billion won, including previously uncollected dividends of 29.6 billion won that were restricted by Pakistan’s central bank.
