Lotte Seeks Up to $1.4 Billion With Malaysia IPO of Petrochemical Unit
Lotte Group, South Korea's fifth-largest conglomerate, plans to take orders next week for an initial public offering of its Malaysian petrochemical unit that could raise up to $1.4 billion, people familiar with the process said Wednesday.
The South Korean company is looking to list its Malaysian subsidiary, Lotte Chemical Titan, by the end of this month. If successful, it would be the largest such offering in nearly two years.
People familiar with the process said four investors--including a Malaysian state-owned fund manager and private insurance companies--have agreed to take up to 20% of the IPO.
A spokeswoman for Lotte Group said that the company plans to launch its Malaysia IPO by July, but declined to give further details.
Plans to list Lotte Chemical Titan were delayed last year after South Korean prosecutors charged the parent company's chairman and four of his family members with tax evasion and embezzlement. The chairman's sister was sentenced to three years in prison in January.
Lotte's troubles subsequently escalated when authorities in South Korea launched an investigation into alleged financial wrongdoing at the parent. In an October statement, Lotte apologized for "causing concern" and said it would cooperate with the investigation process.
The South Korean conglomerate has interests in duty-free stores, luxury hotels and insurance. It boasts annual sales of about $74 billion, and has been controlled by the Shin family since it was established in 1948.
Lotte Chemical is planning to sell 740.48 million shares; people familiar with the IPO process said the company intends sell the shares at a maximum price of 8 Malaysian ringgit ($1.87) a share.
The Malaysia IPO market isn't a big one. The country's biggest IPO to date was in 2015, when power producer Malakoff Corp. Bhd. raised more than $800 million.
Write to P.R. Venkat at venkat.pr@wsj.com
(END) Dow Jones Newswires
June 06, 2017 22:48 ET (02:48 GMT)