Maybank IB may buy up to 27.8m Lotte Chemical Titan shares under stabilising mechanism

PETALING JAYA: Maybank Investment Bank Bhd (Maybank IB) today said it may buy up to 27.8 million shares, or 4.8% of the total number of shares offered under the Lotte Chemical Titan Holding Bhd's initial public offering (IPO) to stabilise its share price.

"The shares may be subject to stabilising action," it said in a filing with Bursa Malaysia today.

Lotte Chemical recently cut the IPO’s size by a fifth due to weak demand with a lower offer price of RM6.50 against RM8 initially. This biggest IPO since 2012 is scheduled to be listed next Tuesday.

Its institutional offering will now involve only 524.22 million shares, compared with the original 684.7 million shares on offer, bringing down the proceeds raised from RM5.92 billion to RM3.77 billion.

Maybank IB said the total purchases made under the price stabilising action is solely for purposes of covering over-allotments of the shares in the IPO, subject to an over-allotment option granted to the stabilising manager.

The price stabilisation mechanism introduced by the Securities Commission in 2008 allows an IPO issuer to appoint a stabilising manager to undertake stabilising action, in order to prevent or minimise a reduction in the share price.