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Hyosung Chemical |
[Alpha Biz= Reporter Kim Minyoung] On the 12th, Korea Ratings stated that "If the sale of its specialty gas division is completed, Hyosung Chemical's credit downgrade pressure will significantly ease." Hyosung Chemical announced the previous day that it had selected a consortium of Stick Investment and IMM Private Equity (IMM PE) as the preferred negotiating partner for the sale of its specialty gas business.
Korea Ratings mentioned, "According to media reports, the estimated sale amount for the specialty gas business is approximately 1.3 trillion won," and noted, "Considering Hyosung Chemical's consolidated net debt of 25 trillion won as of the end of March, the inflow of sale proceeds is expected to reduce financial burdens to about half of the current level."
They also anticipated, "Significant capital strengthening effects due to the large-scale sale profits," and added, "Improvements in financial structure visibility are expected to positively impact accessibility to the capital market."
However, they cautioned, "Since the specialty gas division has partly compensated for the underperformance of the polypropylene (PP) business since 2022, its sale will likely increase dependence on the profitability of the PP business," and pointed out, "This year, expectations are for PP supply increases to exceed demand growth, potentially delaying the recovery of profitability for Hyosung Chemical."
Regarding credit ratings, Korea Ratings affirmed on May 18th that Hyosung Chemical's unsecured bonds were rated 'BBB+' with a stable outlook, maintaining the same assessment as their previous evaluation in March.
Alphabiz Kim Minyoung (kimmy@alphabiz.co.kr)
