Lotte Holdings announced on the 19th that the report on the sale of Theragen Health, in which Lotte Healthcare invested 25 billion won, is "unconfirmed."
According to the report, Lotte Healthcare plans to hold an extraordinary shareholders' meeting on the 24th to resolve on the liquidation of the corporation. The sale of Theragen Health appears to be a measure following the liquidation of Lotte Healthcare. The completion of the liquidation is expected in March next year. Lotte is said to have transferred employment for Lotte Healthcare employees at two intervals, in September and December, at a group level.
In relation to this, a spokesperson for Lotte Holdings noted, "Lotte Healthcare, a 100% subsidiary, is scheduled to hold a shareholders' meeting on the 24th regarding the corporate liquidation," and added, "We will re-announce specifics once they are determined or within one month."
Meanwhile, Lotte Chemical eased its burden by adjusting financial covenants it reached with creditors while facing a liquidity crisis. Lotte Chemical announced that adjustments to the financial covenants regarding the performance-related provisions of the 14 public corporate bonds, which experienced a loss of benefits due to default, have been approved.
By adjusting provisions that caused a violation of financial agreements for corporate bonds valued at 2 trillion won due to worsening revenue, it alleviated the liquidity crisis.
To this end, Lotte Chemical held a meeting of bondholders for each corporate bond from 9 a.m. at Lotte World Tower in Jamsil, Songpa District, Seoul. The provisions will be deleted pending court approval.
Previously, Lotte Chemical failed to meet a requirement among the covenants of the 14 corporate bonds to maintain a three-year cumulative "EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) / interest expense" ratio of over five times. Afterward, Lotte Chemical conducted successive discussions with bondholders following the notice of the bondholders' meeting and public announcement on the 27th of last month.
Lotte Group has also communicated with the main creditor bank to enhance the credit of those corporate bonds, including adding Lotte World Tower, valued at over 6 trillion won, as collateral.
As a result, Lotte Chemical secured a total of 4 trillion won in available liquidity, including 2 trillion won in deposits as of October.
At the meeting, Seong Nak-seon, Chief Financial Officer of Lotte Chemical, said, "Most of the creditors expressed satisfaction after the credit enhancement, and we received over 90% advance agreement through written and verbal consent before proceeding with the meeting." He added, "For the bonds maturing next year, we plan to respond through funding plans such as price revenue swaps, and we expect the debt-to-equity ratio to slightly decrease compared to this year."