KUALA LUMPUR (March 6): Lotte Chemical Titan Holding Bhd (KL:LCTITAN) announced that its parent company, Lotte Chemical Corporation (LCC), is selling a 25% stake in PT Lotte Chemical Indonesia (LCI), which will lower LCC's direct interest in the Lotte Chemical Indonesia New Ethylene Project to 24% from 49%.

LC Titan, in which LCC controls 75.86%, holds the remaining 51% stake in LCI.

LC Titan said LCC has received an offer from a group of companies — comprising one securities company and five special purpose corporations set up by five other securities companies — for the 25% stake in LCI for US$462.7 million (about RM2.05 billion).

LC Titan, which has a right of first refusal to the stake that LCC is selling to a third party at the offer price that LCC gets — based on a 2019 shareholders agreement between LCI, LC Titan and LCC — has decided not to take up the offer. 

"The board of directors of LC Titan wishes to announce that the Board had deliberated and made a decision not to accept the offer by LCC to purchase the sale shares held by LCC in LCI for US$462.7 million," LC Titan's bourse filing read.

Therefore, while LC Titan's stake in LCI will remain at 51%, its parent's direct interest in the ethylene project in Indonesia will be reduced to 24% following the stake sale.

On Thursday, LC Titan's shares closed at 40 sen, near the stock's all-time low of 39 sen, for a market capitalisation of RM924.95 million.

Last month, LC Titan announced that its fourth quarter net loss widened to RM510.07 million from RM186.48 million a year earlier — marking the group’s largest quarterly net loss since its listing in 2017 — as it recorded a whopping impairment of RM940.23 million on property, plant, equipment and right-of-use assets. Its loss before tax for the quarter ended Dec 31, 2024 (4QFY2024) widened to RM645.1 million from RM255.2 million in 4QFY2023, as revenue fell 3.37% RM1.79 billion from RM1.86 billion.

The weak 4QFY2024 showing dragged LC Titan’s full-year net loss to RM1.18 billion in FY2024 versus RM780.29 million in FY2023; revenue dipped 2.76% to RM7.44 billion from RM7.65 billion.