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Malaysia's Lotte Chemical Titan raises $878 million in IPO
July 3, 2017 / 6:11 AM / 4 months ago

Malaysia's Lotte Chemical Titan raises $878 million in IPO

KUALA LUMPUR (Reuters) - Malaysia’s Lotte Chemical Titan Holding [TTNP.UL] raised about 3.77 billion ringgit ($878 million) from an initial public offering (IPO) after pricing its shares at the bottom of an indicative range.

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 million.

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 percent of total demand while 23.5 percent 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 billion 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.

Additional reporting by Joseph Sipalan; editing by Muralikumar Anantharaman and David Clarke

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