KUALA LUMPUR (May 14): Penang-based steel player Tashin Holdings Bhd, en route to list on the ACE Market of Bursa Malaysia by August, expects its initial public offering (IPO) to further strengthen its financial position as it embarks on the next phase of its business expansion plans.
The company, a unit of Prestar Resources Bhd, has today signed an underwriting agreement with M&A Securities Sdn Bhd, Malacca Securities Sdn Bhd and JF Apex Securities Bhd in conjunction with the exercise.
M&A Securities is the adviser, sponsor, managing underwriter, joint underwriter and placement agent for the IPO, while Malacca Securities and JF Apex Securities are the joint underwriters for the exercise.
Pursuant to the underwriting agreement, the three brokerages will underwrite 43.62 million new shares of the total issuance of 59.33 million new shares in Tashin.
"I believe this listing exercise would enable Tashin to strengthen its position in the steel processing and steel manufacturing industries as it charts its future growth story," Tashin managing director Lim Choon Teik said in a statement today.
Proceeds from the IPO will be used mainly for capital expenditure to support the group's business expansion into the production of wire mesh products and to upgrade the existing steel processing line, to purchase land for the construction of a new factory, for working capital which includes the purchase of raw materials and to defray expenses for the listing.
Of the 59.33 million new shares or 17% of the company's enlarged share capital, 17.45 million new shares will be made available to the Malaysian public via balloting; 8.72 million new shares for its eligible directors and employees, as well as those of Prestar; 17.45 million new shares for the entitled shareholders of Prestar; and the remaining 15.71 million new shares are earmarked for private placement to Bumiputera investors approved by the Ministry of International Trade and Industry (MITI).
As part of its listing exercise, the existing shareholders of the company will also make an offer for sale of 55.49 million shares to selected investors and selected Bumiputera investors approved by MITI by way of private placement.
"By being a listed entity, we hope to further increase confidence among our investors, stakeholders and customers while we continue to work towards enhancing the long-term value of our company by providing quality products across our steel processing and steel manufacturing divisions," Lim added.