Lotte Chemical Provides KRW 1.6 Trillion Debt Guarantee for Newly Established Lotte Daesan Petrochemical via Spin-off - Short-term Joint Obligation until Merger
Lotte Chemical decided to provide a joint debt guarantee of KRW 1.6 trillion for Lotte Daesan Petrochemical Co., Ltd., newly established through a physical spin-off
The guarantee period is short-term, from June 1 to August 31, 2026, ending upon completion of the merger with HD Hyundai Chemical
The guaranteed amount equals 9.08% of Lotte Chemical's equity (KRW 17.63 trillion), increasing total guarantee balance to KRW 8.26 trillion
The debtor, Lotte Daesan Petrochemical, is in a capital impairment state with equity of KRW 2.85 billion against liabilities of KRW 1.94 trillion and recorded a net loss of KRW 414.4 billion
This guarantee is a temporary joint obligation due to pre-spin-off debt succession, and its risk is limited as it ends with the merger
[AI Summary]Although the short-term guarantee and the debtor's weak financials pose potential risks, the business restructuring through merger is expected to enhance long-term enterprise value. Impact on shareholder value is neutral
KOSPI Filing Information
Filing: Decision on Debt Guarantee for Others (Major Management Matters of Subsidiary)