Lotte Chemical Titan went public on the Malaysian stock market, creating a foundation for the global operations of Lotte Chemical, according to the company Tuesday.

The listing included 2.38 billion shares including 580 million new shares, with a retail price of MYR6.5 ($1.51) per share. 

LC Titan is the first affiliate under the Lotte umbrella to be listed in Southeast Asia.

The initial share price was lower than the MYR8 that had been initially expected at the prospectus launch in June ahead of the IPO. The number of shares was also adjusted down from an expected 740 million to 580 million shares.

According to Lotte Chemical, the IPO put LC Titan among the top thirty companies on the Bursa Malaysia exchange.

The roughly 1.1 trillion won ($955 million) raised from the new shares will be used to expand ethylene and polypropylene facilities in Malaysia as well as to fund new business in Indonesia. 

Lotte Chemical, an affiliate of the retail giant Lotte Group, bought out Titan Chemicals in Malaysia in 2010 for 1.5 trillion won. Seven years later, its enterprise value stands at about 4.25 trillion won.

Although LC Titan saw operating profit down in the second quarter due to a production disruption caused by problems with water supply, the IPO is likely to lend growth momentum to Lotte Chemical‘s stock starting in the third quarter as demand rises for chemicals, wrote analyst Cho Hyun-ryul for Samsung Securities.

The listing of LC Titan in Malaysia marks a milestone in Lotte Group Chairman Shin Dong-bin’s vision to nurture the group‘s petrochemicals business as a future driver of growth.

Under his leadership, Lotte Chemical acquired Hyundai Petrochemical’s second complex in 2003, KP Chemical in 2004, and Titan Group in 2010. Last year, the company acquired SDI Chemicals and Samsung Fine Chemicals as well.

“LC Titan is a major chemicals company in Southeast Asia, a cluster of newly developing economies. It has successfully achieved stable operations despite an unfriendly business climate and cultural differences between Korea and Malaysia,” said Kim Gyo-hyun, CEO of Lotte Chemical.
“Through this IPO, LC Titan will not only improve its financial structure but also actively expand its facilities and invest in new businesses to become a truly global chemicals company.”

By Won Ho-jung (hjwon@heraldcorp.com)