[Featured Stock] Lotte Chemical Drops 4.72% Due to Credit Rating Downgrade to 'Negative'...

[Asia Economy Reporter Kwon Jae-hee] Lotte Chemical's credit rating downgrade is causing its stock price to weaken. This is due to the increased financial burden on Lotte Holdings itself, following Lotte Chemical's acquisition of Iljin Materials and Lotte Biologics' additional paid-in capital increase.

As of 10:35 a.m. on the 17th, Lotte Chemical was trading at 172,500 KRW on the KOSPI market, down 4.96% from the previous trading day.

Lotte Chemical also closed the previous day’s session down 4.72% at 181,500 KRW.

At the same time, Lotte Holdings was down 2.37% from the previous day at 33,000 KRW, and Lotte Rental was down 0.67% at 29,750 KRW.

The weakness in Lotte Group stocks, including Lotte Chemical, is attributed to the previous day’s adjustment by NICE Credit Rating, which revised the long-term credit rating outlooks of Lotte Chemical, Lotte Holdings, Lotte Rental, and Lotte Capital to 'Negative.'

A 'Negative' rating outlook does not immediately downgrade the credit rating itself but indicates that the financial condition will be monitored over 1 to 2 years, with a possibility of a downgrade being considered.

NICE Credit Rating evaluated Lotte Chemical, stating, "Although absolute financial indicators remain at an excellent level, considering the deteriorated business environment and funding requirements, it will take time to ease the debt burden," and added, "There is a possibility that it will be difficult to maintain the very high level of business and financial indicators corresponding to the current credit rating (AA+) in the mid to long term."

They further noted, "If the creditworthiness of Lotte Chemical, a core subsidiary of Lotte Holdings, declines, it could negatively impact the consolidated credit rating of Lotte Holdings," and pointed out, "The acquisition of Iljin Materials by Lotte Chemical and the additional paid-in capital increase by Lotte Biologics are expected to increase the financial burden on Lotte Holdings itself."