Petrochem major Titan Chemicals to float IPO, to raise 951 Million Ringgit
27 May '05
2 min read
kuala lumpur based largest petrochemicals major titan chemicals corp. will float an ipo to raise about 951 million ringgit ($250 million).
at stake is hiving off a quarter of the business in this malaysia's biggest initial public offering since 2003.
titan produces ethylene and propylene used for making plastic at its $1.4 billion plant in the southernmost malaysian state of johor.
according to investors, demand for the ipo, whose proceeds will be used to reduce titan's debt, may depend on how well ethylene prices sustain last year's gains.
the company controlled by houston, texas-based chao group, exports more than half of its output to china, where demand for plastic parts in factories making phones, computers and other electronic goods caused ethylene prices to more than double to a record last year.
meanwhile, ethylene prices sank 49 percent to $650 a metric ton on may 20, after reaching a record $1,270 per ton on sept. 10, chemicals pricing service icis-lor reported. the decline has cut the profit made by processing naphtha into ethylene to $231.62 a ton from $855.50 a ton in the same period.
profit forecast for titan is set at 604 million-ringgit profits this year, against last years 262 million ringgit, offer documents informs.
the chao group is run by the family of taiwan businessman chao tsing-tung, a pioneer of the island's plastics industry, which controls westlake chemical corp. - a closely held chemical maker based in houston.