KUALA LUMPUR (Sept 24): Lotte Chemical Titan Holding Bhd has received shareholders’ approval for its dividend reinvestment scheme (DRS) during its extraordinary general meeting held today.

At the meeting, 99.99% of shareholders voted for the proposed DRS scheme, as well as the issuance of new Lotte Chemical shares in relation to the scheme.

“The DRS proposal has been carefully evaluated and thoroughly deliberated by our management team and our board of directors. It is an appropriate measure under current circumstances to address the shortfall in meeting the minimum public spread requirement of 25%, as per Bursa Malaysia Securities Bhd’s Listing Requirement,” Lotte Chemical said in a filing with Bursa Malaysia.

The goal of the DRS is to gradually increase the public shareholding spread and trading liquidity through the new ordinary shares issued under the DRS.

The dividend declared for the respective financial year and whether the DRS applies for such dividend will be subject to deliberation and final approval of the company’s board of directors; however, the DRS is dependent on the company’s ability to declare dividends for each financial year moving forward, it said.

In order to meet the minimum public shareholding spread, its parent holding company and largest shareholder, Lotte Chemical Corporation, which currently owns approximately 76% of the company and is deemed as a non-public party, will not be participating in the DRS unless until the said objective is achieved, it added.

In a separate filing dated July 30, the company said its public spread stood at 23.97%, which is below the minimum 25% public shareholding spread requirement.

At noon break, Lotte Chemical was unchanged at RM1.82, bringing it a market capitalisation of RM4.11 billion. Some 457,900 shares were traded.

The stock has rebounded 84% from its March low of 99 sen. Year to date, the stock was still down by 24.5% from RM2.41 on Dec 31, 2019.