KUALA LUMPUR, Sept 7 — Petronas has filed a draft prospectus for an initial public offering of its entire petrochemicals business, moving a step closer towards creating country’s second largest IPO after Maxis.
The draft prospectus on the Securities Commission website did not state how much Petronas Chemical Group is seeking to raise but banking sources have put the value of the firm at over US$2 billion (RM6.25 billion).
Petronas Chemical Group’s IPO is one of two offerings to be launched by government-run Petronas in response to Prime Minister Datuk Seri Najib Razak’s call to reduce state ownership in the private sector and boost liquidity in the stock market.
But according to the draft prospectus, Petronas will remain a controlling shareholder of the firm will 20 over business units. Under the terms of IPO, Petronas Chemical will buy a Malaysian port from Petronas in exchange for almost half of its authorised share capital of 15 billion shares.
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.
“Nothing appears to have changed with Petronas set to hold a sizable chunk of the new company,” said a manager of a fund based in Kuala Lumpur who declined to be named as he is not authorised to speak to the media.
“They (Petronas) may want to safeguard the company because of the uncertain financial markets but a Petronas Chemical IPO should bring in some interest. They appear to be a little clingy.”
The global IPO market, which has focused on China, could face some headwinds due to waning investor enthusiasm linked to uncertain global economic recovery.
RIVAL TO PTT CHEMICAL
Petronas Chemical’s IPO timeline has not been set although IFR Asia reported that pre-marketing was likely to begin next month.
The IPO’s joint global co-ordinators and joint bookrunners are CIMB, Deutsche Bank and Morgan Stanley.
Petronas Chemical, which manufactures olefins and polyolefins, fertilisers, industrial and specialty chemicals, has an annual production capacity of more than 10 million tonnes. It posted an operating profit of US$2.3 billion in fiscal 2009. Regional petrochemical companies, such as Bangkok-listed PTT Chemical, currently trade at 13.9 times 2010 earnings.
Petronas also controls industrial gas supplier Petronas Gas and petrol station operator Petronas Dagangan. — Reuters
