PNB said to be drawn to Lotte's RM5.9bil Malaysian IPO

FILE PHOTO: A flag bearing the logo of Lotte Hotel flutters at a Lotte Hotel in Seoul, South Korea, March 25, 2016. REUTERS/Kim Hong-Ji/File Photo

KUALA LUMPUR: Lotte Chemical Titan Holding Bhd attracted cornerstone investors including state-owned asset manager Permodalan Nasional Bhd to its Malaysian initial public offering, which could raise as much as RM5.9bil, people with knowledge of the matter said.

Prudential Plc’s Eastspring Investments Bhd unit, Great Eastern Holdings Ltd and Malayan Banking Bhd’s asset management arm also plan to buy stock in the offering, according to the people. The plastics manufacturer has set a maximum offer price of RM8 per share, the people said, asking not to be identified because the information is private.

The unit of South Korean ethylene producer Lotte Chemical Corp aims to sign formal cornerstone agreements with the investors Friday, the people said. Lotte Chemical Titan will sell 740.48 million shares in the offering, according to a draft prospectus.

Lotte Chemical Titan joins local KFC operator QSR Brands (M) Holdings Sdn Bhd and Bank Islam Brunei Darussalam Bhd in preparing to sell stock as Malaysia’s benchmark index hovers near a two-year high. A RM5.9bil deal would be the biggest initial public offering in the country since Astro Malaysia Holdings Bhd’s October 2012 share sale, according to data compiled by Bloomberg. 

The company is returning to the Malaysian stock market more than six years after it was taken private in a US$1.25bil deal. Any offering will add to the US$883mil raised from first-time share sales in Malaysia this year, up from US$236mil during the same period in 2016, the Bloomberg-compiled data show.
 
Cornerstone investors typically agree to hold stock for a set period of time in exchange for early, guaranteed allocation. 

A Seoul-based spokeswoman for Lotte Group and a representative for Eastspring declined to comment, while calls to Lotte Chemical Titan’s office in Kuala Lumpur were not answered. 

Representatives for Maybank and PNB said they could not immediately comment, while a representative for Great Eastern did not answer a phone call seeking comment.
 
Plastics produced by Lotte Chemical Titan include polyethylene, used in shopping bags and toys, as well as polypropylene, which can be found in battery casings and car parts. The company also makes olefins that are part of the manufacturing process for rubber and detergent. - Bloomberg