Six Lotte companies to borrow $3.8 billion from four banks

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Six Lotte companies to borrow $3.8 billion from four banks

Published: 07 Apr. 2023, 17:56 Updated: 07 Apr. 2023, 18:27

From left, Lotte Vice President Goh Jung-uk, Woori Bank managing director Kang Shin-kook, Shinhan Bank Vice President Jung Geun-soo, Hana Bank Vice President Sung Young-soo, KB Kookmin Bank Managing Director Seo Young-ik and Lotte Energy Materials CEO Kim Yeon-seop pose for the photo at the memorandum of understanding between Lotte companies and four commercial banks at Lotte World Tower in southern Seoul on Friday. [LOTTE]

Six Lotte companies signed a memorandum of understanding (MOU) with four commercial banks to borrow 5 trillion won ($3.8 billion) at low rates.

Terms will be five years and the funds will be invested into future businesses in the battery and bio sectors, Lotte said.

Details about the rate have not been disclosed.

A total of six Lotte companies — Lotte, Lotte Chemical, Lotte Fine Chemical, Lotte Aluminum, Lotte Energy Materials and Lotte Biologics — participated in the agreement signed with four banks — KB Kookmin, Shinhan, Woori and Hana.

The banks will offer 1.25 trillion won each.

“We plan to carry out eco-friendly businesses to fulfill our promise to support environmental, social and corporate governance initiatives and develop new future growth drivers through the deal,” the four commercial banks said in a statement. “The deal will be a blueprint for companies and financial firms to create synergy over future businesses.”

Lotte’s chemical business plans to produce 1.2 million ton of clean hydrogen and increase the scale of its recyclable businesses by 2030.

Lotte Biologics completed the acquisition of a drug plant of Bristol-Myers Squibb in New York in December, which it bought for $160 million. The plant is currently in operation.

Lotte Biologics aims for annual sales of 1.5 trillion won and a market valuation of 20 trillion won by 2030.

The company also plans to commit 3.7 trillion won to build a 360,000-liter drug manufacturing plant in Songdo, Incheon, by 2030.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]