Hanwha Solutions and DL Group, each holding 50% equity in Yeochun NCC, the third-largest ethylene producer in Korea, decided to inject additional funds, escaping the risk of bankruptcy. However, concerns are rising that the petrochemical market will struggle to recover in the short term, leading to ongoing financial difficulties. Next year, 315 billion won in corporate bonds will mature.
According to industry sources on the 12th, DL Chemical will discuss a plan to lend funds to its subsidiary, Yeochun NCC, at a board meeting that day. This will utilize the paid-in capital of 177.8 billion won received the previous day from DL Group's holding company, DL Co., Ltd. Earlier, Hanwha Solutions also approved a plan to lend 150 billion won to Yeochun NCC at the end of last month.
Yeochun NCC was established in April 1999 as a joint venture between Hanwha Group and DL Group. Hanwha Solutions (formerly Hanwha Petrochemical) and DL Chemical (formerly Daelim Construction) each own 50% equity. In March, Hanwha Solutions and DL Chemical had also increased their capital by 100 billion won each at the request of Yeochun NCC.
With the support of Hanwha Solutions and DL Chemical, the borrowing fund of 300 billion won due on the 21st of this month has become repayable. However, with four corporate bonds maturing next year, the need for funds will continue. Based on the issuance amount, it will total 315 billion won, with maturity amounts of 60 billion won on March 9, 150 billion won on March 11, 35 billion won on May 30, and 70 billion won on October 16.
Yeochun NCC recorded an all-time high operating profit of 1.1 trillion won in 2017. However, due to oversupply from China, it reported net losses of 347.7 billion won in 2022, 240.2 billion won in 2023, and 236 billion won in 2024. The liability ratio soared from 200.1% in 2002 to 331.4% last year.