| KUALA LUMPUR, June 16
KUALA LUMPUR, June 16 Malaysia's Lotte Chemical
Titan Holding Sdn Bhd, en route to a $1.4 billion
initial public offering (IPO) in July, on Friday said it has
drawn five cornerstone investors including Permodalan Nasional
Bhd (PNB) and Eastspring Investments Bhd.
The firm, wholly owned by South Korea's Lotte Chemical Corp
, at its IPO prospectus launch said the other backers
were Great Eastern Life Assurance Malaysia Bhd, Maybank Asset
Management Sdn Bhd and Maybank Islamic Asset Management Sdn Bhd.
Those investors will buy 18.4 percent of shares offered in
an initial public offering (IPO), or about 5.5 percent of the
firm's enlarged issued share capital, Lotte Chemical Titan said.
The integrated petrochemical producer plans to sell 740.4
million shares, or 30 percent of enlarged capital, in Bursa
Malaysia's biggest IPO in over two years as improving commodity
prices and upbeat economic growth stimulate appetite for deals.
Power producer Malakoff Corp Bhd raised 2.74
billion ringgit ($642 million) in May 2015.
With the ceiling IPO price set at 8 ringgit a share, Lotte
Chemical Titan could raise as much as $1.4 billion. IFR, a
Thomson Reuters publication, on Friday reported the firm is
likely to set a price of 7.80 ringgit to 8 ringgit.
Lotte Chemical Titan Chairman Abdul Rahman Mamat, announcing
the IPO prospectus, said the firm has been spending to increase
production capacity for long-term growth.
"Improvements in our operations and profitability are
demonstrated in the 131 percent compound annual growth rate in
our earnings before interest, tax, depreciation and amortisation
from 2014 to 2016," he said.
The firm, which earns 70 percent of revenue at home and in
Indonesia, will use the IPO proceeds to build a naphtha cracker
plant in its southern neighbour.
Its IPO prospectus showed net profit more than doubled to
1.32 billion ringgit in 2016, on revenue that fell 1 percent
from a year prior to 8.14 billion ringgit.
Also, Lotte Chemical Titan's 2009 annual report showed
state-linked asset manager PNB, one of its cornerstone
investors, owned 5.58 percent of its shares before Lotte
Chemical's 2010 acquisition.
Lotte Chemical Titan originally planned the IPO for last
year but postponed after South Korea began investigating Lotte
Group for alleged wrongdoing.
Credit Suisse, JP Morgan and Maybank are joint global
coordinators for the IPO. Bookrunners are CIMB, HSBC and Nomura.
($1 = 4.2710 ringgit)
(Reporting by Liz Lee; Editing by Christopher Cushing)