Friday 29 Mar 2024
By
main news image

KUALA LUMPUR (Oct 30): Eagle US 2 LLC (Eagle US) has exercised its call option to buy an additional 34.79% stake in LACC LLC — a joint venture in which Lotte Chemical Titan Holding Bhd (LCT) holds an effective 35.2% stake.

The equity stake in LACC LLC, which owns an ethane cracker plant in Louisiana State, was transacted at US$816.47 million (RM3.41 billion). The plant carries an annual capacity to produce one million tonnes of ethylene.

Before the share transaction, Lotte Chemical USA Corp (LC USA) held an 88% stake in LACC LLC while Eagle US owned 12%.

According to a filing with Bursa Malaysia, LC USA, in which LCT holds a 40% equity interest, has sold the 34.79% stake to Eagle US.

LCT’s parent Lotte Chemical Corp holds the remaining 60% stake in the LC USA.

Upon completion of the transaction, Eagle US’ shareholding in LACC LCC will increase to 46.77% while LC USA is left with the remaining 53.23%.

In a filing with Bursa Malaysia, LCT said the call option also allows Eagle US to increase its equity interest in LACC to 50%.

Of the total proceeds, 25% will be used to pay off the syndicated term loan facility obtained by LC USA to fund the US Shale Gas Project and the remainder will be used by LC USA for new business plans in the USA such as the expansion of plants and downstream business, according to the filing.

LCT also expects to generate a one-off gain on disposal that would have a material impact on the group’s financial statements.

Apart from the ethane cracker plant co-owned with Eagle USA, LCT and Lotte Chemical Corp also operate a petrochemical facility with annual capacity of 700,0000 tones of mono-ethylene glycol located in Lake Charles, Louisiana.

Shares of Lotte Chemical Titan closed three sen or 1.20% lower at RM2.48, for a market capitalisation of RM5.64 billion. The company saw some 754,300 shares traded. Year-to-date, the counter has eased 46.32% from RM4.62.

      Print
      Text Size
      Share