Lotte Chemical said on Oct. 30 its US subsidiary Lotte Chemical USA plans to secure $816.5 million as it agreed to transfer a 34.8 percent stake in LACC, a joint venture dedicated to a petrochemical project in Louisiana, to Eagle US 2.
LACC is an 88-12 joint venture between Lotte Chemical USA and Eagle US 2 -- an entity within Houston-based Westlake Chemical.
An aerial view of LACC's petrochemical complex in Louisiana
The transaction, which gained board approval on Oct. 29, comes as Eagle US 2 exercised a call option signed in June 2015, under which Eagle US 2 may raise equity interest in LACC to 50 percent.
Following the transaction, Eagle US 2’s ownership in LACC will rise to 46.77 percent, while Lotte Chemical USA’s will drop to 53.23 percent.
Lotte Chemical USA will use 25 percent of the proceeds from the transfer for early repayment of the term loan for its shale gas project in the US, while the rest will be used for investments in new business opportunities, Lotte Chemical said in a disclosure.
Founded in 2015, LACC started running ethane crackers in the first half of 2019 in Lake Charles, Louisiana, after three years of construction. The facility carries an annual capacity to produce some 1 million tons of ethylene and is designed to support Lotte Chemical USA’s ethylene glycol production.
Lotte Chemical USA is jointly owned by Seoul-based Lotte Chemical and its Malaysian subsidiary Lotte Chemical Titan.
By Son Ji-hyoung (email@example.com)