FILE PHOTO: The logo of Lotte Chemical is seen at its building in Seoul, South Korea, June 7, 2016. REUTERS/Kim Hong-Ji/File Photo
KUALA LUMPUR: Over 4,000 shareholders of Lotte Chemical Titan Holding Bhd
have returned shares amounting to RM226.25mil at the close of the buy back offer period.
Maybank Investment Bank, on the petrochemical company’s behalf, told Bursa Malaysia on Monday that following the closing of the offer period on Tuesday last week, it had received valid acceptances from 4,125 shareholders holding a total of 34.808 million shares.
“As a consequence of the buy back offer, the IPO proceeds (are reduced) by the equivalent amount of RM226.25mil or 6% to RM3.544bil,” it said.
The group, listed on July 11, was originally expected to raise RM6bil under what was touted as the largest initial public offering (IPO) since 2012. However, the IPO was relaunched at a lower price of RM6.50 - versus the initial RM8.00 - and at a 23% lower volume of offered shares (524.22 million shares) following lukewarm global investors’ appetite.
Of the three projects to be funded by the public issue proceeds, only the one requiring the biggest expenditure will see reduced allocation - the integrated petrochemical facility.
The project’s allocation will now be RM2.59bil.
Based on the original plan, the facility will comprise a cracker plant as well as polyolefins, olefins and derivatives plants to be built on 99.16ha near its existing plants in Merak, Banten province, Indonesia.
“The company confirms that the change in proceeds is not expected to materially affect the company’s ability to fund the development and construction of the integrated petrochemical facility,” it said.
Non-compliance with public shareholding spread requirement
With these 34.808 million shares bought back being kept as treasury shares plus the 27.768 million shares bought by stabilising manager Maybank IB under the over-allotment option, the company’s public shareholding spread is now 24%.
As such , Lotte Chemical does not comply with the public shareholding requirement.
“The company will be submitting an application to Bursa Securities to seek, inter-alia, an extension of time to rectify the shortfall in the public shareholding spread no later than July 25,” it said.
“As at the date of this announcement, the company is in the midst of exploring all possible options vis-à-vis the prevailing market conditions to address the shortfall in the public shareholding spread.”
Stabilisation effort
Maybank IB has ceased the stabilising action for Lotte Chemical on Monday, ahead of the expiry of the 30-day maximum stabilisation period.
Under the stabilisation effort, it has bought back a total of 27.768 million shares, representing 4.8% of the total number of shares offered under the IPO. That is the maximum number of shares subject to the over-allotment option given to Maybank IB.
The shares were bought at average prices ranging between RM6.2770 and RM6.4718 each. That translates into more than RM174mil worth of shares.
Lotte Chemical shares declined by 6 sen to RM6.27 at the close of Monday’s trading, with 3.656 million shares changing hands.
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