Stick Investment completed refinancing for its Lotte Energy Materials acquisition and replaced its lending syndicate with Korea Investment & Securities as the sole arranger. The special purpose company Stick Special Situation Win LLC signed a loan agreement worth approximately 205.2 billion won on the 10th, according to investment banking industry sources. The previous seven-institution syndicate including Kookmin Bank, Shinhan Bank, and Korea Development Bank was replaced by Korea Investment & Securities. The loan matures on July 10, 2029, with a fixed annual interest rate of 6.3 percent and a revolving credit facility with variable rates. This refinancing addresses Lotte Energy Materials' evolving business portfolio as the company shifts from EV battery copper foil toward AI accelerator circuit boards and energy storage system battery foils, supported by Q1 2025 results showing revenue of 159.8 billion won and a return to net profitability of 3.9 billion won.
Korea Investment & Securities Replaces Seven-Institution Syndicate
The refinancing reduced the loan size from the previous 560 billion won agreement signed in April to 205.2 billion won. The earlier loan had a December 10 maturity with a 6.5 percent annual fixed rate. The transaction refinanced approximately 170 billion won in remaining debt, with an additional 30 billion won revolving credit facility added in the final stage. Korea Investment & Securities served as the sole arranger and is reportedly selling down portions of the loan to other financial institutions, which may alter the final syndicate composition.
Collateral Includes 6.25 Million Shares Plus Convertible Bonds
Stick Investment provided 6,254,628 common shares of Lotte Energy Materials and the full amount of convertible bonds as collateral. The convertible bonds have a face value of 150 billion won and an exercise price of 28,612 won per share, which would yield an additional 5,242,555 common shares upon full conversion. Combined with existing common shares and convertible bond exercise potential, Stick's total holdings amount to 11,497,183 shares, representing a 19.96 percent ownership stake. Korea Investment & Securities evaluated the convertible bond face value and common share collateral as factors enhancing loan stability.
Stick Investment Maintains Long-Term Position in Lotte Energy Materials
Stick Investment acquired stakes in the overseas copper foil business of Iljin Materials, the predecessor of Lotte Energy Materials, through two rounds of investment in 2019 and 2021. The firm arranged acquisition financing for those transactions. Rather than pursuing an exit through stake sales, Stick proceeded with new loan arrangements to restructure the capital structure. Korea Investment & Securities previously participated in Stick Investment's Cleantopia acquisition financing alongside Shinhan Bank and Woori Bank, and joined as a co-investor in the Ulsan GPS and SK Multi-Utility minority stake acquisitions.
Lotte Energy Materials Reports Q1 Operating Loss Reduction
Lotte Energy Materials reported Q1 revenue of 159.8 billion won, a 1.2 percent increase compared to the same period last year. Operating loss decreased from 46 billion won to 5 billion won, a reduction of approximately 41 billion won. Net income turned positive at 3.9 billion won compared to a 54.8 billion won loss in the prior year period. The company produces battery foil for electric vehicles and energy storage systems, as well as circuit boards for AI accelerators and IT products. An investment banking industry source stated that Lotte Energy Materials' product portfolio and profitability are expected to improve as dependence on EV copper foil decreases and the proportion of AI accelerator circuit boards and ESS battery foils increases.
FAQ
What did Stick Investment do with its Lotte Energy Materials lending syndicate?
Stick Investment replaced its seven-institution lending syndicate with Korea Investment & Securities as the sole arranger. The special purpose company signed a 205.2 billion won loan agreement on the 10th, with a maturity date of July 10, 2029, and a 6.3 percent annual fixed interest rate.
How did Lotte Energy Materials perform in Q1 2025?
Lotte Energy Materials reported Q1 revenue of 159.8 billion won, up 1.2 percent year-over-year. Operating loss decreased from 46 billion won to 5 billion won, and net income turned positive at 3.9 billion won compared to a 54.8 billion won loss in the prior year period.
What collateral did Stick Investment provide for the refinancing?
Stick Investment provided 6,254,628 common shares of Lotte Energy Materials and convertible bonds with a 150 billion won face value as collateral. The convertible bonds have an exercise price of 28,612 won per share and can be converted into 5,242,555 additional common shares.
