The move comes as Lotte Chemical, which held about 4 trillion won in liquidity as of October, failed to meet some of its bond covenant requirements last week, triggering fears of possible default.
Korea's fifth-largest conglomerate Lotte Group said it would offer Lotte World Tower, valued at more than 6 trillion won, as collateral to secure bank guarantees for Lotte Chemical's corporate bonds.
The 123-story tower, owned by Lotte Property & Development Co., cost 4.2 trillion won to build and stands as Korea's tallest building and the sixth-highest skyscraper in the world.
"The group aims to dispel market concerns through this collateral offering and deliver a message that Lotte Chemical has no liquidity issues," Lotte Group told the media.
Lotte Chemical plans to hold a bondholders' meeting on Dec. 19 at the 113th floor of Lotte World Tower to discuss adjusting its bond covenant terms in exchange for enhanced credit through bank guarantees.
The announcement comes as Lotte Group faces broader challenges, with its retail arm reviewing closure of about 10 underperforming department stores and its healthcare unit deciding to shut down its personalized healthcare platform just a year after launch.
The group said it maintains stable liquidity with total assets of 139 trillion won, including stock holdings worth 37.5 trillion won and real estate valued at 56 trillion won.
Lotte Group is scheduled to announce its regular executive reshuffle later Thursday, with sources expecting limited changes to top management positions amid the current business challenges.
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