S. Korean investor to sell Lotte Chemical to YB Group.

KARACHI -- A South Korean chemical company announced on Monday it's exiting the Pakistan market after 13 years.

Lotte Chemical Company Pakistan Ltd said its South Korea-based majority shareholder is selling its entire stake of 75.01 per cent in the local firm to optimise its overall business portfolio.

Separately, Lucky Core Industries Ltd said it's buying the shareholding from the foreign investor. Neither of the two companies disclosed the size of the transaction in their respective securities filings.

But based on a Bloomberg News story that referred to the transaction value in the South Korean currency, analysts said the deal was signed at Rs31.30 per share. This means the local acquirer will pay $155.8 million or Rs35.5 billion for a three-quarters stake in the company valued at $207.7m.

Speaking to Dawn, Arif Habib Ltd CEO Shahid Ali Habib said the importance of the deal couldn't be overemphasised in view of the prevailing economic and political situation.

'It's a great transaction in the sense that a local conglomerate has stepped up and demonstrated its commitment to the country,' he said.

Lotte Chemical Company makes purified terephthalic acid (PTA), which is a raw material for textile and packaging industries. The company enjoys a captive market of sorts as the country's only manufacturer and supplier of PTA. Its entire output is consumed by the local textile and packaging industries.

Mr Habib insisted that the divestment of shares by the Korean investor shouldn't be construed as flight of foreign capital from Pakistan.

'The Koreans were looking for an exit for about a year and a half. Their decision has nothing to do with our local issues,' he said.

The foreign investor will use the proceeds of the divestment to expand its 'value-added operations' and enter 'eco-friendly materials business'.

Mr Habib added that the local buyer - which is a part of the Yunus Brothers Group that controls stakes in cement, textile, power generation and commodity trading businesses - is expected...