Indorama Ventures, the Bangkok-based chemical company, is considering a $1 billion US initial public offering of its Olefins business unit on Wall Street. This move could be a game-changer for the industry and provide significant growth opportunities for investors. With Indorama’s proven track record of success and increasing demand for olefins worldwide, this IPO promises to be one worth keeping an eye on. In this blog post, we will explore the potential benefits and risks of Indorama’s IPO and what it means for the future of the company as well as the global economy.
Indorama to list subsidiary on US stock exchange
Indorama Ventures, one of the world’s largest producers of polymers, is considering an initial public offering (IPO) of its U.S. subsidiary on a major American stock exchange. The move would value the business at up to $10 billion and mark a significant milestone for the Thai company, which has transformed itself from a small family-owned business into a global powerhouse in just two decades.
If successful, the IPO would be one of the largest by a Southeast Asian company on a U.S. exchange in recent years. It would also underscore the growing importance of Thailand as a hub for multinational companies seeking to tap into Asia’s booming economy.
Indorama’s U.S. subsidiary, Indorama Polymers USA, is one of the leading producers of polyethylene terephthalate (PET) resin, used to make everything from beverage bottles to food packaging and textiles. The business has annual sales of around $2 billion and operates six manufacturing plants in the United States, with a total capacity of 2 million tons per year.
The potential IPO comes as Indorama prepares to spin off its downstream businesses into a separate listed entity, Indorama Ventures Packaging, later this year. That move is part of Indorama’s strategy to focus on its core upstream businesses – namely, petrochemicals and fibers – and become the world’s largest integrated producer of PET resin and fibers by 2025.
Reasons for the move
The move comes as Indorama looks to shore up its finances amid the COVID-19 pandemic. The company has been hit hard by the slump in demand for its products, which include polyester, yarn, and fabric.
Indorama is also facing increased competition from Chinese companies that have been able to take advantage of the pandemic to gain market share.
The company has already raised $2 billion through a rights issue and asset sales, but it is now looking to raise additional funds through an IPO.
The proceeds from the IPO will be used to repay debt and help fund Indorama’s expansion plans. The company is planning to build new plants in India and Bangladesh.
Indorama is one of the world’s largest producers of polyester and has a significant presence in the global textile industry. The company’s products are used in a wide range of applications, including apparel, home furnishings, and industrial applications.
What the IPO could mean for Indorama
An IPO would give Indorama a much needed infusion of cash to help it pay down debt and finance future growth. It would also allow the company to tap into the U.S. capital markets, which could provide it with a cheaper source of financing than it currently has access to.
The IPO could also help boost Indorama’s profile in the United States, where it is not as well-known as it is in Asia. This could lead to more business opportunities for the company in the future.
Indorama is still considering whether or not to go ahead with the IPO, and no final decision has been made yet. If it does go ahead with the offering, it would likely be one of the largest IPOs ever by a Thai company.
How Indorama plans to use the proceeds
Indorama plans to use the proceeds from the potential $1 billion US IPO of its chemicals business to expand capacity and for working capital. The company also sees the listing as a way to increase its profile in the United States, where it has been growing through acquisitions.
Indorama is one of the world’s largest producers of polymers and fibers, with operations in more than 20 countries. The chemicals business that it is considering spinning off through an IPO accounted for about a third of the company’s $12.6 billion in sales last year.
If successful, the listing would value the chemicals business at around $10 billion and would be one of the biggest IPOs by a Southeast Asian company in recent years.
Other recent IPOs by Thai companies
In recent years, Thai companies have been increasingly turning to the US for their IPOs. In 2018 alone, there were six Thai companies that completed IPOs on US exchanges, raising a total of $3.1 billion. This trend looks set to continue in 2019, with Indorama Ventures, one of the world’s largest manufacturers of petrochemicals, considering an IPO of its US subsidiary on the New York Stock Exchange.
If successful, this would be the largest ever US IPO by a Thai company and would value the business at around $10 billion. Indorama Ventures has been on something of a roll in recent years, with its revenues more than doubling from $5 billion in 2013 to $11.6 billion in 2018. The company is benefiting from strong demand for its products from Asia’s rapidly growing economies, as well as from the shift by Western companies towards using more environmentally friendly materials.
With over 10,000 employees and operations in 30 countries, Indorama Ventures is a truly global business. Its listing on the NYSE would be another step in the company’s transformation from a family-owned business into a world-class corporation.
Conclusion
This is an exciting move for Indorama and its proposed US IPO of a unit will certainly be closely watched. It could potentially open the door to future investments from the Wall Street market, allowing Indorama to scale up their operations in the future. The capital raised from this IPO will allow Indorama to continue innovating and pushing boundaries with their products, creating exciting opportunities for growth in both Bangkok and on Wall Street.
