Lotte Chemical's Battery Material Company Acquisition Involves Capital Increase Participation by Holding and Affiliate Companies (Update)

Participation in Paid-in Capital Increase... Additional Acquisition of 2,105,692 Shares for Approximately 301.1 Billion KRW

Electrofoil 'I2S' for secondary batteries by Iljin Materials

[Asia Economy Reporter Choi Dae-yeol] Lotte Holdings announced on the 22nd that it will participate in the paid-in capital increase of its subsidiary Lotte Chemical and additionally acquire 2,105,692 shares for approximately 301.1 billion KRW.

As a major shareholder, Lotte Holdings will participate in Lotte Chemical's paid-in capital increase worth 1.2155 trillion KRW through a rights offering. The second-largest shareholder, affiliate Lotte Property & Development, will also participate in the capital increase with an investment of 235.3 billion KRW.

The 2,105,692 shares that Lotte Holdings plans to acquire consist of 1,754,744 shares allocated to existing shareholders and 359,480 shares from the over-subscription limit. Existing shareholders can participate in the paid-in capital increase proportionally to their current shareholding, but if some existing shareholders waive their rights, others can subscribe up to 120% of the allocated shares for existing shareholders.

After acquiring the shares, Lotte Holdings' stake in Lotte Chemical will be 25.4%. The scheduled acquisition date is January 31 of next year. Lotte Property & Development's stake will be 19.9%.

Lotte Chemical announced last month that it decided on a paid-in capital increase to respond to the complex crisis caused by global inflation and supply chain instability. The amount of the capital increase was initially 1.105 trillion KRW, consisting of 500 billion KRW for operating funds and 605 billion KRW for acquiring securities of other companies, but on this day, the operating funds were increased to 610.5 billion KRW.

The funds raised through the paid-in capital increase will be used to acquire copper foil manufacturer Iljin Materials. Lotte Chemical plans to acquire Iljin Materials for 2.7 trillion KRW. Regarding the acquisition funds for Iljin Materials, Lotte Chemical stated at a corporate briefing on the 21st of last month that it will cover 1 trillion KRW with internal funds including the paid-in capital increase, and is currently negotiating external borrowings for 1.7 trillion KRW.