KUALA LUMPUR: Shares in Lotte Chemical Titan Holdings Bhd rose this morning, after the company announced a plan to sell a 49% stake in Indonesian unit.
The counter fell 5.32%, or 14 sen to RM2.77, making it one of the top gainers on Bursa Malaysia, with 647,000 shares traded.
Lotte Chemical planned to trim its equity stake in PT Lotte Chemical Indonesia (LCI) by selling a 49% stake in the subsidiary to its parent Lotte Chemical Corp (LCC) for US$65.4mil (RM273.49mil) cash.
Lotte Chemical will still hold a 51% stake in the Indonesian unit after the share sale.
The rationales for the proposed divestment are the challenging petrochemical business environment and financial performance, which are causing continuous margin compression of LCT’s profits as well as a decrease in cash flows from operations.
Of the total cash proceeds of RM273.49mil, the bulk of RM251.49mil (91.96%) will be utilised to fund the Integrated Petrochemical Facility Project (IPF) project, while the remaining RM22mil will be used for estimated expenses.
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