DEAL: Lotte Chemical's IPO in Malaysia

Author: Brian Yap | Published: 20 Jul 2017

A South Korean chemical producer has tested Malaysia’s listing regime with a last-minute about-turn on the entire structure of its initial public offering, with all parties involved scrambling to save the initial public offering (IPO) amidst regulatory uncertainty. 

Lotte Chemical, owned by Seoul-based Lotte Corp, has successfully raised the largest IPO on the main market of the Kuala Lumpur Stock Exchange (Bursa Malaysia Securities) since 2012, at nearly $880 million. This came following a last-minute revision of both the size and the pricing of the public float, which saw a 30% reduction in the original amount, and approval for an unprecedented post-listing buyback offer.

The Kuala Lumpur bourse hosted its largest IPO for 5 years

But during the bookbuilding process, take-ups were on the lower end as the ‘long funds’ only showed tepid interest. A decision had to be made whether to extend the institutional offering period or...