Friday, November 26, 2010

Petronas Chemicals, largest IPO in Southeast Asia, bullish on outlook

KUALA LUMPUR: Petronas Chemicals Group Bhd, the biggest initial public offering (IPO) in Southeast Asia, sees more upside for the prices of petrochemicals which would benefit the low-cost producer.

Petronas Chemicals chairman Datuk Wan Zulkiflee Wan Ariffin said the coming calendar year would see the upcycle in petrochemical prices.

"We are very bullish about the outlook going forward. As for Petronas Chemicals, we are a low cost producer and we have got very integrated operations with diversified products," he said at a press conference on Friday, Nov 26 after its listing on Bursa Malaysia.

The integrated petrochemicals producer made its debut at RM5.71 which is about a 10% or 51 sen above its institutional offering price of RM5.20. Its retail price was RM5.04. The IPO of RM41.6 billion is the largest in Malaysia and Southeast Asia based on the institutional price.

Petronas Chemicals president and chief executive officer Datuk Tengku Mahamad Tengku Mahamut said that the debut price was "excellent" and that he was very satisfied with the price.

He said its listing exercise received significant interest from Malaysian retail and global institutional investors. It was expected to raise about RM12.8 billion, making it the largest ever IPO and equity offering to be completed in Malaysia.

The retail offering attracted applications with a value of RM3.7 billion for 729 million shares, representing a subscription rate of 2.5 times. This was the highest amount ever applied for under a retail offering in Malaysia thus far.

'The institutional offering (excluding the offering to cornerstone and bumiputera investors approved by MITI) attracted orders amounting to a staggering RM92.6 billion.

'The positive response received for the offering is a clear reflection of the strong foreign and local investor community's trust and confidence in PetChem in particular and in the Malaysian capital market and Bursa Malaysia in general,' he said.

Tengku Mahamad said looking ahead; the newly-listed Petronas Chemicals would be well equipped with additional funding, strong management expertise and steady supply of raw materials, integrated production facilities and a skilled workforce to meet the growing local and regional demand for its products.

Petronas Chemicals is the national oil company's integrated petrochemicals producer and is also one of the largest petrochemicals producers in South East Asia which primarily manufactures, markets and sells a range of petrochemical products such as olefins, polymers, fertilisers, methanol and other basic chemicals and derivative products.

Post-listing, Petronas Chemicals will consolidate its petrochemical activities and maximise efficiency as well as strengthening its marketing and sales network. While over the medium to longer term, it plans to expand its product portfolio and production capacity and will also consider potential acquisitions for growth.

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