Lotte Chemical Titan slips on debut in biggest IPO in five years

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KUALA LUMPUR: Shares of Lotte Chemical Titan Holding Bhd fell in their Malaysian stock market debut on Tuesday due to soft investor appetite for the country’s biggest initial public offering in five years.

Lotte Chemical Titan started trading on Bursa Malaysia at its IPO offer price of RM 6.50 per share, but had drifted lower to RM 6.44 by 9.42 this morning.

The integrated petrochemical producer, part of South Korean conglomerate Lotte Group, raised RM 3.77 billion in the IPO – the largest in Malaysia since 2012.

Last week, the company had to cut the size of its offering by a fifth to 580 million shares after its books were undersubscribed.

The IPO was priced at the lower end of the indicative price range of RM 6.50-8.00 per share.

Maybank, the principal adviser on the deal, said on Friday that it might buy the over-allotment shares to stabilise the counter’s price, if needed. Over-allotment shares represent 4.8% of the total amount of shares offered in the IPO.

Credit Suisse, JPMorgan and Maybank were joint global coordinators for the IPO. Bookrunners were CIMB, HSBC and Nomura.

“The proceeds raised from our IPO will be used to drive our expansion plan in the ASEAN region to further improve operations and capacity…” Lotte Chemical Titan CEO Lee Dong Woo said on Tuesday.

The funds would be used to construct a polypropylene plant in the southern Malaysian state of Johor, develop an integrated petrochemical facility in Indonesia and upgrade the company’s existing naphtha cracker, he said.

Lotte Chemical Titan had originally planned the IPO for last year but postponed it after South Korean authorities began investigating Lotte Group for alleged wrongdoing.