MOSCOW (MRC) -- Malaysia's Lotte Chemical Titan Holding, a subsidiary of Lotte Chemical Corp, has raised about 3.77 B ringgit (USD878 MM) from an initial public offering (IPO) after pricing its shares at the bottom of an indicative range, reported Hydrocarbonprocessing.
The IPO was, nevertheless, the biggest stock market flotation in Malaysia since 2012.
The integrated petrochemical producer, part of South Korean conglomerate Lotte Group, had initially planned to price its offer last week. However, due to a lukewarm reception from investors it instead relaunched the IPO on Monday after slashing the shares on offer by a fifth to 580 MM.
It also lowered the indicative price range to 6.50-8.00 ringgit per share from 7.60–8.00 ringgit earlier. In a statement on Tuesday, Lotte Chemical Titan said the IPO had been priced at 6.50 ringgit.
The company said global institutional investors accounted for about 30% of total demand while 23.5% of the shares was taken up by five local cornerstone investors.
"The institutional offering of the IPO received strong demand from both Malaysian and global institutional investors, and was oversubscribed," the company said in a statement.
At 6.50 ringgit a share, Lotte Chemical Titan will have a market capitalization of about 15 B ringgit, it said. The shares are due to start trading on Bursa Malaysia on July 11.
Sources familiar with the matter had told Reuters that retail interest for the IPO was weak as investors had deemed the offer overvalued.
"Ninety percent of the institutional investors are long-only funds," one source said, declining to be named as the process was private.
The offering attracted five cornerstone investors - Permodalan Nasional, Eastspring Investments, Great Eastern Life Assurance Malaysia, Maybank Asset Management and Maybank Islamic Asset Management.
Credit Suisse, JPMorgan and Maybank are joint global coordinators for the IPO. Bookrunners are CIMB, HSBC and Nomura.
As MRC wrote before, on 29 April 2016, Lotte Chemical Corp. finalized the takeover of Samsung Group’s chemical units in about six months after the announcement of "Big Deal" in October 2015. Samsung Fine Chemicals, which was completely taken over by Lotte in Feb., changed its name to Lotte Fine Chemical, while SDI Chemical, which completed the acquisition process on the 29th, changed its name to Lotte Advanced Materials through the general meeting of stockholders.
Established in 1976, Lotte Chemical has been solidifyng its position by localizing cutting-edge petrochemical technologies. Among the high-quality products produced by Lotte Chemical through its efficient processes are ethylene, HDPE, LDPE, LLDPE, PP, functional resin, EG, SM, PIA, PET, etc. Lotte Chemical’s products are being distributed to 152 countries around the world. With the acquisition of Pakistan’s PTA in 2009, Artenius in the UK in 2010 and Titan Chemical Corp., Lotte Chemical is now able to efficiently supply excellent products to an increasing number of countries. The company is further accelerating its efforts to strengthen its global competitiveness by establishing overseas branches in Hong Kong, Russia, and USA, along with the sales corporation in China for active sales activities both in domestic and abroad.