Updates on Petronas Chemicals Group Berhad (PCGB) IPO


Petronas Chemicals Group Berhad (PCGB) is looking to raise as much as US$4 billion (RM12 billion) in its initial public offering (IPO) in Bursa Malaysia. This is exceeding the earlier estimates of over US$2 billion (RM6 billion) as it hopes to tap strong global investor demand for Asian stocks.

Last month, Petronas filed a draft prospectus for an IPO of its petrochemical business.

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.

PCGB which owned by state oil giant Petroliam Nasional Bhd (Petronas), could become the largest share offering in the country, exceeding Maxis’ US$3.3 billion (RM10 billion) listing last year.

PCGB is the manufactures of olefins and polyolefins, fertilisers, industrial and specialty chemicals, will have formal investor roadshows slated to begin on October 27. The deal is expected to be priced on November 12.

Petronas Chemicals has an annual production capacity of more than 10 million tonnes. It posted operating profit of US$2.3 billion (RM7 billion) in fiscal 2009, according to its prospectus.

About 31 per cent of the company shares will be floated, out of which 11.5 per cent will be offered to Bumiputera investors, 15.5 per cent to foreign and domestic institutions, 2 per cent each to retail investors and Petronas employees.

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

PCGB 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, Deutsche and Morgan Stanley are joint global coordinators and bookrunners, while Citigroup and UBS are co-bookrunners.

The company is raising funds for expansion of business, working capital and corporate needs.

Updates 14th October

The price PCGB IPO will be likely at RM5.05 for retail investors and RM5.20 for institutions. The IPO comprises 2.48 billion new and existing shares.

Updates 1st November
Offer period are between 1st to 9th November 2010. You can subscribe at nearby ATM machine or with your stock broker. Tentative date of listing is on 26th November 2010.

Leave a Comment

  • insaint 2nd November, 2010, 11:46 pm

    From your opinion, it is worth investing?

    • 1mdb.com 3rd November, 2010, 12:49 am

      I think it is worth to subscribe. Look at Malaysia Marine and Heavy Engineering Holdings, the price going up >20% on the first day of listing. If you are long term, also OK. This company is very stable.

      • tiger 30th November, 2010, 7:45 pm

        PCGB shares keep dropping like under performance and under value company eventhough the their fundamental is strong. What is the next target price for PCGB share.

  • danny 4th November, 2010, 3:44 pm

    it is worth to invest in this share ? just worry the price will fall when it listed later

    • 1mdb.com 5th November, 2010, 11:44 am

      I think its worth. I am going to subscribe.

  • Akmal 12th November, 2010, 11:17 am

    How to buy the share when u are public figure?is it open to their staff only to buy share?just ask

    • 1mdb.com 12th November, 2010, 2:22 pm

      It is open to public. Anyone can buy. Look under “Stock Market Guide” Category. I have a post on how to buy IPO.

      Unfortunately, the dateline to buy PCG IPO is over.

      • syakira 27th December, 2010, 6:23 pm

        hi..i am a student..i got an assignment regarding petronas IPO. i need your assistant, on how to evaluate the petronas IPO. what criteria that i need to analyze to make the investment decision.
        hopefully you can guide me. thank you.

        • 1mdb.com 27th December, 2010, 7:41 pm

          To invest in a company in stock market, normally you look for PE Ratio, Gearing Ratio, Dividend Yield, Free Cash Flow and Growth.

          • syakira 31st December, 2010, 1:06 pm

            can i get all the details from the prospectus? i mean the details that used to calculate all you mention above..

          • 1mdb.com 31st December, 2010, 7:36 pm

            Yeah, download the prospectus. There will be financial data there & start calculating.