DL Chemical is selling its medical synthetic rubber subsidiary, Cariflex, to Glenwood Private Equity.
On November 4, DL announced that it is in the process of selling Cariflex and has signed a binding memorandum of understanding with Glenwood PE to establish key terms before the final contract is signed. The sale involves a 100% stake in Cariflex.
Cariflex, which DL Chemical acquired from Kraton in 2020 for 620 billion won, is a leading company in the medical isoprene (IR) latex sector. This product is used in surgical gloves and rubber stoppers for syringes and is highly regarded for its lack of natural rubber proteins that can cause allergies.
Cariflex has been expanding its production capacity, completing an expansion of its Brazilian plant in 2021 and inaugurating a new polyisoprene plant in Singapore in May of last year.
Following its acquisition by DL Chemical, Cariflex saw significant improvements in performance due to a surge in demand for medical synthetic rubber gloves during the COVID-19 pandemic.
However, the sale of this cash-generating subsidiary is driven by financial burdens faced by the DL Group. After acquiring Cariflex, DL Chemical took on approximately 1 trillion won in debt due to the subsequent acquisition of Kraton's headquarters in 2022.
The downturn in the petrochemical industry has also exacerbated financial pressures. Yeocheon NCC, a joint venture established by DL Chemical and Hanwha Solutions, has continued to incur losses due to oversupply and demand slowdown from China, leading to ongoing funding challenges. DL Chemical provided 250 billion won in support to Yeocheon NCC last year.
The market estimates the scale of this transaction to be in the mid to high range of 1 trillion won.
On November 4, DL announced that it is in the process of selling Cariflex and has signed a binding memorandum of understanding with Glenwood PE to establish key terms before the final contract is signed. The sale involves a 100% stake in Cariflex.
Cariflex, which DL Chemical acquired from Kraton in 2020 for 620 billion won, is a leading company in the medical isoprene (IR) latex sector. This product is used in surgical gloves and rubber stoppers for syringes and is highly regarded for its lack of natural rubber proteins that can cause allergies.
Cariflex has been expanding its production capacity, completing an expansion of its Brazilian plant in 2021 and inaugurating a new polyisoprene plant in Singapore in May of last year.
Following its acquisition by DL Chemical, Cariflex saw significant improvements in performance due to a surge in demand for medical synthetic rubber gloves during the COVID-19 pandemic.
However, the sale of this cash-generating subsidiary is driven by financial burdens faced by the DL Group. After acquiring Cariflex, DL Chemical took on approximately 1 trillion won in debt due to the subsequent acquisition of Kraton's headquarters in 2022.
The downturn in the petrochemical industry has also exacerbated financial pressures. Yeocheon NCC, a joint venture established by DL Chemical and Hanwha Solutions, has continued to incur losses due to oversupply and demand slowdown from China, leading to ongoing funding challenges. DL Chemical provided 250 billion won in support to Yeocheon NCC last year.
The market estimates the scale of this transaction to be in the mid to high range of 1 trillion won.
* This article has been translated by AI.
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