Petronas Chemical Group Berhad (PCGB) IPO

Petroliam Nasional Berhad

Petronas Chemical Group’s IPO is one of two offerings to be launched by government-run Petronas in response to Prime Minister Najib Razak’s call to reduce state ownership in the private sector and boost liquidity in the stock market when unveiling NEM early this year.

Petronas has filed a draft prospectus for an initial public offering (“IPO”) of its entire petrochemicals business. The new entity, Petronas Chemical Group Berhad (“PCGB”) is formed  by merging of 22 Petronas wholly owned or majority owned subsidiaries. PCGB has total assets of about RM27 billion as of March 2010.

Petronas Chemical Group’s IPO will be the country’s second largest IPO after Maxis Communication Berhad. PCGB is expected to be listed next month

The draft prospectus on the Securities Commission website did not state how much PCGB is seeking to raise but banking sources have put the value of the firm at over $2 billion (RM 6.2 billion).

Details on the shape and size of the group is provided by the draft prospectus but it did not mentioned the pricing of the IPO shares. However, it is likely that PCG will be listed at a price earnings multiple of around 15 times.

Petronas also would like to maintain control around 70% of PCGB  to safeguard the company because of the uncertain financial markets.

Petronas Chemicals would have a number of anchor investors, made up of both local and foreign institutions. Among them are Employees Provident Fund (“EPF”) and Technip, a French oilfield services group.

That has raised investors concerns that the firm will remain an illiquid stock like many of the government-linked companies that make up more than half of the benchmark FTSE Bursa Malaysia KLCI Index

CIMB Investment Bank Bhd was appointed as PCGB’s principal adviser and managing underwriter, with Deutsche Bank AG and Morgan Stanley & Co helping as joint global coordinators and bookrunners.

Second public offering will follow with the group’s heavy engineering unit, Malaysia Marine and Heavy Engineering respectively. Malaysia Marine is forecasted to raise between $400 million and $500 million (RM1.2 billion to RM1.6 billion).

Leave a Comment

  • Wiley 18th September, 2010, 12:52 am

    This stock will probably be another low volume counter. The floating is so little. Deducting institutional’s portion (most likely khazanah and epf), the total shares floating in the market will be very likely less than 10%. Will foreign fund be interested at this? What about local players? I don’t see any interest will be generated for this stock, unless it’ll be paying high dividend.
    anyway, why list at the first place? Listing is to generate cash for expansion and growth. for this case, i don’t think so!

  • Ronnie Wong 27th October, 2010, 5:05 pm

    Petronas is the biggest company in Asia have a good reputation in Oil & Gas business. No wonder they list at the low price because the total Dana is big. Of course the price will be list is high compare to others. The max of share increases only around 20% in 3 month. After than that the share will be go down until after Election. If you have extra money better but and you where not worry the risk is low.

  • beer10 16th January, 2011, 1:09 pm

    Petronas has filed a draft prospectus for an initial public offering (

  • 16th January, 2011, 3:05 pm


    Yes, Petronas Chemical was listed in Bursa Malaysia last November.

  • kim 20th December, 2011, 5:31 pm

    Do you have petronas dodo (owner operation ) in malaysia? How do you applied for dodo? What are the requirements?
    Please feedback asap.
    Thank you.