UPDATE 1-Malaysia's Petronas Chem prices IPO, raising $4.1 bln

By Fong Min Hun KUALA LUMPUR, Nov 12 (Reuters) - Malaysia's Petronas Chemicals priced the institutional portion of its IPO at the top end of an indicative range, in Southeast Asia's biggest IPO worth about $4.1 billion. The IPO of the unit of state oil firm Petronas is the latest in a series of multi-billion dollar offerings in the region, fueled by foreign investors in search of greater returns and looking to capitalize on strong economic growth. Petronas Chemicals said on Friday it priced the institutional portion of the IPO at 5.20 ringgit ($1.67) per share after it attracted orders of approximately 92.6 billion ringgit. It had set an indicative price range of 4.50-5.20 ringgit a share. The retail portion was priced at 5.04 ringgit a share at a predetermined 3 percent discount to the institutional price. "The bookbuilding exercise has attracted significant interest from various types of investors globally," company chairman Wan Zulkiflee Wan Ariffin said in a statement. Petronas Chemicals said it may grant an over-allotment, or greenshoe, option of 372 million shares over and above the IPO shares. At the retail price, this option is worth 1.9 billion ringgit. The diversified chemicals maker did not announce the cover ratio of the bookbuilding exercise. But David Ng, chief investment officer of HwangDBS Investment Management, told Reuters that the book was covered more than 10 times although initial response to the IPO was poor. "With the rising oil prices and as the management roadshow progressed, we sensed that a lot of demand has picked up since," Ng said in an email when asked about demand for the IPO. "Additionally, there has been tremendous retail interest on this IPO as they have been missing a lot of the recent rally, and some of them are participating in this IPO as an indirect entry into the market." But there could be heavy retail selling upon listing as a lot of share-financing was obtained for the IPO, Ng added. CIMB Investment is the principal adviser for the IPO while Deutsche Bank and Morgan Stanley are acting as joint bookrunners. The listing of Petronas Chemicals is the second IPO this year by Petronas, which floated Malaysia Marine and Heavy Engineering in October. ($1=3.112 Ringgit) (Editing by Muralikumar Anantharaman) Keywords: PETRONASCHEMICALS/ (fong.minhun@thomsonreuters.com; +603-2333-8039; bureau email areuters@gmail.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.

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