[Featured Stocks] Despite Clarifying 'Liquidity Crisis Rumors'... Lotte Shopping and Lotte Chemical Precision Hit New Lows Together

Lotte Shopping and Lotte Fine Chemical Record Lowest Prices in One Year
Lotte Chemical Identified as Source of Liquidity Crisis Due to Financial Weakness
Speculation of Partial Affiliate Sales...Company to Clarify via IR

Stock prices of Lotte Group affiliates continue to struggle. Although the company has calmed concerns over liquidity crises raised by some, the stock prices are sinking.

As of 10:26 a.m. on the 26th, Lotte Shopping is trading at 55,800 won, down 2.28% (1,300 won) from the previous trading day. This is below the one-year low of 56,100 won recorded on the 18th, the day when the liquidity crisis of Lotte Group first emerged in the market. Lotte Chemical also recorded a 52-week low, trading at 35,250 won, down 1.40%.

When rumors of a liquidity crisis surfaced, Lotte Group actively denied them, calling them "groundless." As of October, Lotte Group's total assets amounted to 139 trillion won, with stock holdings valued at 37.5 trillion won, real estate at 56 trillion won, and immediately available deposits of 15.4 trillion won. In addition, intangible assets such as inventory and accounts receivable total 30.1 trillion won.

It is interpreted that the actual poor financial condition is causing anxiety. In particular, Lotte Chemical, which is experiencing a downturn in its industry, is identified as the "origin" of the liquidity crisis. On the 21st, the Korea Securities Depository announced that Lotte Chemical had triggered an Event of Default (EOD), meaning creditors can demand early repayment of loans before maturity.

Although it is assessed that the possibility of creditors declaring a default is slim due to sufficient cash reserves, it is also true that Lotte Chemical's financial situation is not good. Since 2022 through the third quarter, Lotte Chemical has recorded operating losses exceeding 1.6 trillion won. There is no sign of a turnaround in the near future. There are also talks that various affiliates, including Lotte Rental and Lotte Department Store Centum City branch, may be put up for sale to rescue Lotte Chemical. On the 26th, Lotte Group plans to hold an investor relations (IR) meeting targeting institutional investors to clarify the situation.