The Korea Development Bank announced on July 22 that it held a meeting with bond financing institutions to support the restructuring of the Yeosu No. 1 project under the 'Structural Innovation Support Agreement.'
The Yeosu No. 1 restructuring plan is a collaborative effort by Yeochun NCC, Lotte Chemical, Hanwha Solutions, and DL Chemical to reorganize the petrochemical industry. The Ministry of Trade, Industry and Energy approved the final restructuring plan on July 20, and the government announced a tailored support package that includes financial, tax, cost reduction, and research and development (R&D) assistance, as well as support for local economies and job stability.
During the meeting, the Korea Development Bank and bond financing institutions discussed financial support measures necessary for the restructuring, in conjunction with the government’s support initiatives. Key agenda items included deferring repayment of existing bonds and providing new investment funding for the restructuring.
According to the restructuring plan, Hanwha Solutions and DL Chemical's downstream facilities, along with Lotte Chemical's basic chemical operations at the Yeosu plant, will be integrated into Yeochun NCC. The newly formed entity will aim to rationalize naphtha cracking facilities (NCC), enhance vertical integration, shift towards a high-value product-focused business structure, and improve its financial structure.
Lotte Chemical, DL Chemical, and Hanwha Solutions plan to transfer their basic chemical operations to the new entity while concentrating their capabilities on core businesses, aiming to advance their operations towards high-value, eco-friendly advanced chemicals.
Amid increasing uncertainty in naphtha supply due to geopolitical instability in the Middle East, bond financing institutions previously provided Yeochun NCC with a $300 million emergency import letter of credit (L/C) and $350 million to Lotte Chemical during the ongoing restructuring due diligence.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.