Discussions regarding financial support for the restructuring of the Lishui Petrochemical Industrial Park have been delayed compared to the original plan. Because the relevant companies have failed to reach a conclusion on which equipment to cut and the scale of the cuts, the creditors' review of the support has not yet formally commenced.
Initially, with the decision to close the third plant of Yeocheon NCC in the Yeosu Industrial Park, a full-scale restructuring was expected to commence. Furthermore, the integration and adjustment of overlapping equipment between Lotte Chemical and Yeocheon NCC had been proposed, and the overall business restructuring plan had been finalized. However, the actual scope of equipment or plants to be cut has not yet been determined, and even a self-negotiated meeting among creditors has not been convened.
The additional restructuring targets mentioned in the Yeosu Industrial Park include Yeocheon NCC's first and second factories, and Lotte Chemical's Yeosu factory. However, no agreement has been reached on which additional factories will be closed. The Industrial Bank had considered actively participating in the discussions. However, due to concerns that this might be seen as putting pressure on companies, the Industrial Bank withdrew from the discussions.
This delay has also burdened creditors. A financial industry insider explained, "At least the scale and general outline of the facilities to be cut must be determined before on-site investigations for financial support can begin." In other words, without a clear blueprint for business restructuring, it's difficult to even begin discussing the form of support.
On the other hand, besides Yeocheon NCC, which is expected to undergo a large-scale restructuring starting this year, other petrochemical companies in the Ulsan Industrial Complex are also planning similar adjustments. While S-Oil, Daehan Petrochemical, and SK Geo Centric have jointly submitted restructuring plans, coordination is expected, particularly taking into account the market response to S-Oil's new "Sahin Project," which is expected to begin production this year. Requests for financial support or discussions with creditors appear likely to only proceed after such prior coordination is completed.
In contrast, for Lotte Chemical and HD Modern Chemical, the independent agreement committee has already been convened, and on-site investigations by creditors are currently underway. It is expected that the direction of support for these companies will become clear as early as around the Lunar New Year holiday next month. This shows that the speed of financial support varies depending on the level of detail in the structural adjustment discussions.
This trend could directly impact not only the Lishui Industrial Park but also the speed and direction of restructuring within the domestic petrochemical industry as a whole. If the uncertainties surrounding structural adjustments are not eliminated, support from creditors will inevitably be delayed, raising concerns that this could ultimately weaken the industry's overall resilience.
