Lotte Chemical listing a vote of confidence for Malaysia

Mustapa (middle) alongside Abdul Rahman (right) during the launch of LCT’s prospectus yesterday. — Bernama photo

KUALA LUMPUR: Lotte Chemical Titan Holding Bhd’s (LCT) proposed listing on the Main Market of Bursa Malaysia reaffirmed Malaysia’s position as one of the preferred destinations for investment, said Minister of International Trade and Industry, Datuk Seri Mustapa Mohamed.

The minister said LCT, the largest integrated producer of olefins and polyolefins in Malaysia, is now the largest South Korean investor in the country.

“As the biggest initial public offering (IPO) since 2012, this is a vote of confidence in Malaysia’s market, foreign direct investment attractiveness and excellent facilitation of government agencies and regulators in assisting the companies operating here,” he said at the launch of LCT’s prospectus en route to its listing on Bursa Malaysia Securities on July 11.

The IPO will see the sale of some 740.5 million shares, or about 30 per cent of the enlarged issued share capital of LCT.

At the retail price of RM8.00 per share, LCT is expected to raise gross proceeds of about RM5.9 billion through the base offering of this IPO and achieve a post-listing market capitalisation of some RM19.7 billion, making it the largest IPO in Malaysia since August 2012 and the largest in Southeast Asia since May 2013.

LCT Chairman, Tan Sri Abdul Rahman Mamat said the funds raised from the exercise would be utilised over the next 12 to 36 months to finance the company’s expansion in Malaysia and Indonesia.

About 83.2 per cent of the gross proceeds is to partially fund the development of a RM15.5 billion integrated petrochemical facility in Indonesia to increase the company’s ethylene production by up to 1,000 KTA (kilo tonnes per annum) capacity.

Another 10.5 per cent from the IPO proceeds will go for the construction of a new polypropylene plant in Johor to increase production by 200 KTA.

Meanwhile, Lotte Chemical Corporation President/Chief Executive Officer, Kim Gyo Hyun, said upon completion of the IPO, Lotte Chemical’s stake in its wholly-owned subsidiary in Malaysia would be diluted to 70 per cent.

“This will enable LCT to undertake expansion plans in line with the group’s ambition for LCT to become the number one petrochemical company in Southeast Asia,” he said.

Formerly known as Titan Chemicals Corp Bhd, which was listed on the Main Board of Bursa Malaysia in 2005, the Malaysian company was acquired by the Lotte Group in 2010 in all-cash deal valued at about RM3 billion.

LCT’s listing will mark Titan’s return to the Malaysian equity market after it was delisted in 2011 following the takeover by Lotte Group.

According to the prospectus, LCT aims to pay dividends in the amount equal to about 50 per cent of its consolidated net profits every fiscal year. — Bernama

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