KUALA LUMPUR: Lotte Chemical Titan Holding Bhd, one of Malaysia’s biggest initial public offerings (IPOs) in recent years, made a steady debut on the Main Market of Bursa Malaysia Securities at its revised offer price of RM6.50 on Tuesday.
At 9.04am, it was trading at RM6.50. There were 14 million shares traded at prices ranging from RM6.47 to RM6.53.
The FBM KLCI fell 1.23 points or 0.07% to 1,755.90. Turnover was 56.84 million shares done valued at RM103.60mil. There were 86 gainers, 76 losers and 166 counters unchanged.
Lotte Chemical, a producer of olefin and polyolefin and a unit of South Korean multinational ethylene producer Lotte Chemical Corp, is the biggest public offering in the country since 2012.
It fixed its institutional price at RM6.50 per IPO share (previously guided at between RM7.60 and RM8 per IPO share) after completing its bookbuilding process.
At this price, it will raise about RM4bil from the IPO, RM2bil less than the earlier envisaged total of RM6bil. It will have a market capitalisation of RM15bil.
Last Friday, Maybank Investment Bank, which is the stabilising manager for the IPO, said it may buy up to 27.76 million shares to stabilise the share price.
The stabilising action shall be the earlier of the 30 days when the shares start trading or the maximum of 27.76 million shares, which is about 4.8%of the shares offered under the IPO.
Lotte Chemical cut the number of share issuance by almost a quarter from the initially planned 740.5 million.
Under the IPO, Lotte Chemical said the 524.21 million shares offered to institutional funds were fully subscribed.
The IPO also included a retail offering of 49.36 million shares for the public and 6.417 million for directors, eligible employees and staff of the subsidiaries, which was also under-subscribed.
As part of its move to ensure the stock price is stabilised, Lotte Chemical said that it would be making a share buyback offer in respect of the IPO shares subscribed by retail investors and non-cornerstone bumiputra investors.
The exercise involves up to a maximum of 59.2 million shares, representing 2.57% of the company’s enlarged share capital, at a final retail price of RM6.50 per share.
The buyback offer will involve RM384.8mil, assuming all the affected investors accept the offer, and is to be funded from the IPO proceeds.