Lotte Chemical Titan IPO proceeds shrink further after retail share buyback

PETALING JAYA: Lotte Chemical Titan Holding Bhd saw its initial public offering (IPO) proceeds shaved a further 6% to RM3.54 billion with the completion of its share buyback scheme for retail investors, in addition to an earlier 36% cut in the amount raised after a reduction in the number of offer shares and price.

Lotte Chemical Titan shares fell six sen to RM6.27 with 3.65 million units traded yesterday. Its market capitalisation stood at RM14.47 billion.

The group said in a filing with the stock exchange yesterday that 34.8 million shares were purchased, denoting 41% of the shares allotted to retail and non-cornerstone bumiputra investors. The exercise closed on July 18.

The group through its adviser Maybank Investment Bank said it had received valid acceptances from 4,125 shareholders with a combined shareholding of over 34.80 million shares worth RM226.25 million.

The group said the proceeds would be enough for the development and construction of its planned integrated petrochemical facility. The bulk of the proceeds equivalent to 73.03% or RM2.59 billion is for the construction of an integrated petrochemical facility in Banten Province, Indonesia. About 17.5% or RM620 million will be used for the PP3 project ( a new polypropylene plant in Pasir Gudang, Johor) while the remaining RM220 million or 6.21% will go to the TE3 project (to increase production of facilities in Pasir Gudang). The rest will be used for listing expenses.

The exercise led to the group breaching the 25% public shareholding mark. It has until next Tuesday to rectify the 1% percentage point shortfall.

In a separate filing with Bursa Malaysia Securities, Maybank Investment, Lotte Chemical Titan’s stock price stabilising manager, said it had reached the limit of its stabilising action, having bought 27.768 million shares from the open market for between RM6.277 and RM6.4718 a share.

Meanwhille, Lotte Chemical Corp has decided not to exercise its over-allotment option, which means that the shares bought under the stabilisation action will be returned to it.