On August 14, DL Group held a board meeting and decided to provide financial support of 150 billion won to Yeochun NCC, a petrochemical joint venture in a liquidity crisis, similar to Hanwha Group’s earlier decision. This move has temporarily alleviated the threat of bankruptcy for Yeochun NCC, but the conflict between the major shareholders, Hanwha Group and DL Group, remains an issue to watch.
DL Chemical convened an emergency board meeting on this day to discuss a funding proposal for its subsidiary, Yeochun NCC. Previously, on the 11th, DL Chemical had resolved to raise 200 billion won through a rights offering to support this funding. At that time, DL Group emphasized its commitment to responsible management as a major shareholder of Yeochun NCC and its efforts to restore the company to normal operations.
Yeochun NCC, a joint venture equally owned by DL Chemical and Hanwha Solutions, has taken a step back from the brink of bankruptcy due to DL’s decision. By the end of this month, Yeochun NCC needed to secure 180 billion won and an additional 310 billion won by the year’s end. With Hanwha Solutions deciding to lend 150 billion won at the end of July, followed by DL’s matching support, the necessary liquidity for the year has been successfully secured.
With the funding support confirmed, whether the conflict between the two shareholders can be resolved is crucial. Hanwha has advocated for the provision of new funds and prioritized financial structure improvements through phased reductions. In contrast, DL has emphasized the need for long-term solutions such as raising ethylene prices.
Yeochun NCC, established in 1999 as a joint venture by Hanwha Group and DL Group, is co-owned by Hanwha Solutions and DL Chemical holding 50% of the shares each. Despite being the third largest domestic producer of ethylene (a basic raw material in petrochemicals obtained by refining crude oil and natural gas), Yeochun NCC has faced deficits for three consecutive years since 2022, impacted by an oversupply from China.