Lotte Chemical Titan Holding Berhad (LCT), the largest integrated producer of olefins and polyolefins in Malaysia, was recently listed on the Main Market of Bursa Malaysia Securities Berhad (“Bursa Securities”) under the “Industrial Products” sector.
LCT’s listing is the largest initial public offering (“IPO”) to date in Malaysia this year, and the largest in Malaysia since 2012, raising approximately RM4 billion. Based on the IPO price of RM6.50 per share, its market capitalisation will be approximately RM15 billion (approximately USD3.5 billion).
At the listing ceremony, Dr. Lee Dong Woo, LCT’s President and CEO said, “We are delighted to celebrate the completion of our listing on the Main Market of Bursa Securities and reintroduce a stronger LCT to the market. The support from quality long only Malaysian and global investors will ensure a strong shareholder base for the company. The positive sentiment amongst investors is also indicative of their trust in LCT as well as their appetite and confidence in Malaysia as an attractive investment destination.”
The institutional book building tranche (including the shares clawed back from the retail tranche, as well as the over-allotment option of approximately 27.8 million shares) was oversubscribed, with strong demand received from both Malaysian and foreign institutional investors. The demand from foreign institutional investors accounted for approximately 30% of the total demand received.
LCT secured five cornerstone investors, namely, Permodalan Nasional Berhad, Maybank Asset Management Sdn Bhd, Maybank Islamic Asset Management Sdn Bhd, Eastspring Investments Berhad and Great Eastern Life Assurance (Malaysia) Berhad, who had subscribed severally and not jointly for an aggregate of 136 million IPO shares, representing approximately 23.4% of the base offering of the IPO.
The retail offering received more than 7,000 applications from the Malaysian public for approximately 32 million shares. A total of approximately 2.5 million shares set aside for Directors of LCT, eligible employees of the LCT Group and persons who contributed to the success of the LCT Group, were also taken up.
Moving forward, LCT expects to strengthen its position to meet growing demand for petrochemical products at home and abroad. To that end, the company has four on-going projects, three of which located in Malaysia and Indonesia will be partially funded via the proceeds from the IPO over the next 12 to 36 months.
This includes approximately RM2.8 billion (approximately 74.6%) of the gross proceeds to partially fund the development of an integrated petrochemical facility in Indonesia, approximately RM620 million (approximately 16.4%) for the construction of a new polypropylene plant in Johor, and approximately RM220 million (approximately 5.8%) to upgrade its existing naphtha cracker in Johor. The integrated petrochemical facility in Indonesia is scheduled to commence commercial operations in 2023. LCT’s expansion plans remains on track even though a lesser amount was raised than initially targeted.
The fourth, the US Shale Gas project, is a joint venture with Lotte Chemical Corporation to construct and operate an ethane cracker plant and a MEG plant in the United States.