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.