Lotte Group, one of South Korea's largest conglomerates, said Wednesday it will provide Lotte World Tower in Seoul as collateral for the corporate bonds of its financially-strapped chemical unit in an effort to address market concerns about a potential liquidity crisis.

In a regulatory filing, the group said it will use the 123-story supertall skyscraper, one of its key assets worth 6 trillion won ($4.31 billion), as additional collateral for bonds issued by Lotte Chemical Corp.

A bondholders' meeting is scheduled for Dec. 19 to further discuss the matter.

Lotte Group said the decision represents its strategic commitment to maintaining the financial stability of Lotte Chemical.

"By providing Lotte World Tower as collateral, we aim to dispel concerns in the market and to send a clear message that there is no liquidity issue with Lotte Chemical," the group said.

"The decision is a practical measure that emphasizes the group's strong will to resolve a recent crisis rumor. The group will take responsibility for a recent crisis and address the issue," it added.

Lotte Chemical held 4 trillion won in readily available deposits, the group said, noting that it has sufficient liquidity to repay the principal and interest of bonds.

Concerns over the liquidity crisis came as the chemical firm has experienced falling profitability amid an industry downturn.

In the third quarter of 2024, the company swung to the red by posting an operating loss of 413.6 billion won, compared with a profit of 42.6 billion won a year ago.

Lotte World Tower is the tallest building in South Korea and is currently owned by Lotte Property & Development. (Yonhap)