Lotte Chemical Titan submits draft prospectus for Main Market listing

PETALING JAYA: Lotte Chemical Titan Holding Bhd, a Malaysian unit of South Korea’s conglomerate Lotte Group, is seeking to list on the Main Market of Bursa Malaysia to fund its expansion plans.

In a draft prospectus exposure with the Securities Commission, the petrochemical producer said its initial public offering (IPO) will entail the issuance of 740.48 million shares, of which 55.78 million shares will be made available to retail investors.

The total institutional and retail offerings represent about 30% of its enlarged issued share capital. Upon completion of the IPO, it will have 2.47 billion issued shares.

Earlier, it was reported that Lotte Chemical could raise as much as US$1.5 billion (RM6.61 billion), the largest IPO in Malaysia in years. Lotte Group had in a filing with the Korea Exchange targeted a listing in the third quarter of the year.

Proceeds raised from IPO will be used to partially finance the development of its integrated petrochemical facility (in Banten Province, Indonesia), the TE3 Project (facilities in Pasir Gudang, Johor, to increase the production of ethylene, propylene and by-products) and the PP3 Project (a new polypropylene plant, also in Pasir Gudang).

Lotte Chemical produces polyolefins, comprising polyethylene and polypropylene and olefins, comprising ethylene and derivatives such as butadiene, tert-butyl alcohol, benzene and toluene.

Currently it owns and operates 14 plants which are supported by on-site facilities such as co-generation plants, tank farms and waste water treatment facilities across Indonesia and Malaysia. Its products are exported to about 60 countries including China and South Korea, and those in Southeast Asia, the Indian sub-continent, and Europe.

The group said it intends to continue expanding its product portfolio to meet the increasing domestic and global demand.

Lotte Chemical highlighted that it was the fourth largest producer of polyolefin products in Southeast Asia by production capacity in 2016.

“In 2016, we represented 53% of the domestic polyethylene production capacity and 100% of the domestic polypropylene production capacity in Malaysia as well as a 57% market share by production capacity in polyethylene in Indonesia,” it noted.

Lotte Chemical’s net profit more than doubled to RM1.32 billion in 2016 from RM614.07 million in 2015.