Doubts have been raised whether Gokongwei flagship JG Summit Holdings Inc. (JG Summit) can easily sell its petrochemicals business, JG Summit Olefins Corp. (JGSOC), in light of the number of distressed giant petrochemical companies in the region that are “in the same boat.”

“There is no assurance of a sale given that there are other distressed petrochem plants in the region and JGSOC might not be the best target for potential buyers,” said Abacus Securities Corp.

It added that, “Moreover, management has indicated they expect to book a major impairment charge in the current quarter, suggesting the net realizable value/proceeds won’t be substantial.

The brokerage also cited a Bloomberg article about the South Korean government pushing the local petrochemical industry to restructure after one firm, Yeochun NCC, nearly defaulted last month.

“In total, Yeochun and several of its peers have a combined 15 trillion Korean won of local debt ($10.8 billion) and another $7.4 billion in dollar bonds. By comparison, JGSOC had about $1.6 billion in debt that was absorbed by its parent,” Abacus said.

While the South Korean government is prepared to step in, it has set a year-end deadline for the industry to submit detailed plans for cutting capacity and other reforms.

“The takeaway here is that if highly efficient petrochemical companies in a very developed economy can’t make money, who would be willing to take on the challenge of turning around JGSOC? Or how low would JG Summit would be willing to sell just to get this albatross off its back?

“Against such a backdrop, we rate the odds of disposal as quite low, probably less than 30 percent, within the two-year time frame given by management,” Abacus said.

JG Summit reported that its net income inched up in the first half of 2025 due to the strong performance of its subsidiaries, coupled with tapering losses in its petrochemical business, which was closed this year.

The firm said its net income improved to ₱15 billion in the first semester of 2025 from ₱14.8 billion in the same period last year.

Among other factors, JG Summit President and Chief Executive Officer (CEO) Lance Y. Gokongwei credited the higher earnings to “lower losses from the shutdown of our petrochemicals facility.”

From the time the prolonged shutdown of JGSOC’s petrochemical plant was approved by the board in May 2025, all of its debt has been transferred to the parent company and cash burn has also been significantly reduced, while its liquefied petroleum gas (LPG) trading arm continues to operate.