LOTTE Chemical Titan Holding Bhd, en route to a listing on Bursa Malaysia next month, expects to raise RM5.9 billion from its initial public offering (IPO).
The IPO will see the sale of 740.5 million shares, or 30 per cent stake.
The IPO comprises an institutional offering of 684.7 million shares and a retail offering of 55.8 million shares.
At a retail price of RM8 per share, Lotte Chemical Titan is expected to boast a market capitalisation of RM19.7 billion upon its listing.
The IPO will be the largest in Malaysia since the listing of Felda Global Ventures Holdings Bhd in August 2012, which raised RM10.5 billion.
Lotte Chemical Titan has drawn five cornerstone investors — Permodalan Nasional Bhd (PNB), Great Eastern Life Assurance (M) Bhd, Eastspring Investments Bhd, Maybank Asset Management Sdn Bhd and Maybank Islamic Asset Management Sdn Bhd.
They will collectively buy 136 million shares, which represents 18.4 per cent of the base offering of the IPO, or about 5.5 per cent of the firm’s enlarged issued share capital.
International Trade and Industry Minister Datuk Seri Mustapa Mohamed said Lotte Chemical Titan’s IPO confirmed Malaysia’s position as one of the better destinations for investment.
“Malaysia’s capital market grew to RM2.84 trillion last year, with the total capital raised from the equity market at RM12.8 billion, despite headwinds.
“This year, we observed that the stock market has had a good recovery in the first quarter and we hope this trend will continue amid sustained growth in the domestic economy. Year-to-date, we have seen six new listings in the market,” he said at Lotte Chemical Titan’s prospectus launch, here, yesterday.
The IPO proceeds will be used to finance the company’s expansion in Malaysia and Indonesia. A total of 83.2 per cent, or RM4.91 billion, will be used to partially fund the development of a RM15.5 billion integrated petrochemical facility in Indonesia.
The expansion is expected to increase Lotte Chemical Titan’s ethylene production by up to 1,000 kilo tonnes per annum.
Lotte Chemical Titan president and chief executive officer Lee Dong-woo said it was pursuing investments to expand and diversify its product portfolio and optimise existing operation, on the back of steady growth in Southeast Asia that supported the increase in capacity.
He said Lotte Chemical Titan had benefited from parent company Lotte Chemical Corp’s operational expertise and industrial know-how.
“Our investments in the Tanjung Langsat and Pasir Gudang plants have effectively made us one of the Lotte Chemical Corp’s largest manufacturing concerns outside of South Korea,” he added.