[Alpha Biz= Kim Jisun] Seoul, October 12 — Stick Investment Co., Ltd. (026890) is seeking a one-year extension on its ₩300 billion acquisition financing related to its investment in Lotte Energy Materials (020150), as refinancing efforts have stalled due to the company’s weak financial performance.
According to investment banking (IB) industry sources, Stick Investment recently requested that the loan syndicate, led by KDB Industrial Bank, KB Kookmin Bank, and Shinhan Bank, agree to extend the maturity, which currently expires next month. About 10 domestic financial institutions participated in the syndicated loan.
This marks the second maturity extension since the financing was first arranged. The acquisition loan initially had a five-year term, but was extended once last year. Typically, private equity firms refinance such loans to secure longer repayment terms and adjust interest conditions in their favor. However, refinancing fell through last year as Lotte Energy Materials continued to post losses.
The extension requires unanimous consent from all lenders. Given that the borrower is an affiliate of the financially strong Lotte Group, and that concessions such as partial senior loan repayment and fee compensation are likely to be offered, market observers view the approval as highly probable. “Despite ongoing losses, expectations remain for improved performance in Lotte’s European operations,” an IB industry official noted.
Stick Investment had invested a total of ₩1.25 trillion between 2019 and 2021 in three overseas subsidiaries of Iljin Materials, a copper foil manufacturer for secondary batteries. About ₩500 billion of that investment was financed through acquisition loans. When Lotte Group acquired Iljin Materials, the company was renamed Lotte Energy Materials, and Stick Investment partially recouped its investment and repaid part of the financing.
Currently, Stick Investment maintains its position in Lotte Energy Materials through equity holdings and bonds with warrants (BWs). Despite the strategic backing of Lotte Group, the company’s recent performance remains challenging — posting ₩902.2 billion in revenue and a ₩64.4 billion operating loss in 2023, and ₩362.9 billion in revenue with a ₩77.1 billion operating loss in the first half of 2024.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
