KUALA LUMPUR (Aug 23): Pantech Group Holdings Bhd (KL:PANTECH) has confirmed that it will be listing two wholly-owned subsidiaries — Pantech Stainless & Alloy Industries Sdn Bhd (PSA) and Pantech Steel Industries Sdn Bhd (PSI) — on the Main Market of Bursa Malaysia via a special purpose vehicle (SPV) named Pantech Global Bhd.

In a filing with Bursa Malaysia on Friday, Pantech said the proposed listing will enable the group to unlock and crystallise the value of its investment, as well as provide an avenue for its existing shareholders to participate in the equity of Pantech Global.

For Pantech Global, its listing will create a separate platform on the Main Market so that it will be able to raise equity and debt financing independently from the holding company, Pantech said.

As part of the listing exercise, the SPV will acquire the entire issued share capital of PSA and PSI from Pantech for RM180.08 million (PSA) and RM113.80 million (PSI).

Both acquisitions will be satisfied by the issuance of new Pantech Global shares at 50 sen per share. A total of 587.77 million new shares of Pantech Global will be issued to the holding company for this purpose.

Upon completion of the proposed acquisitions, Pantech Global will undertake an initial public offering (IPO) of 262.23 million new shares, representing 30.85% of its enlarged issued share capital. The issue price will be determined later.

Of the 262.23 million new shares to be issued, 21.25 million shares, representing 2.5% of the enlarged issued share capital, will be made available for application by the Malaysian public via balloting, 50% of which are to be set aside for Bumiputera investors.

Further, 29.75 million IPO shares, representing 3.5% of the enlarged issued share capital, will be available for application by eligible directors and employees of the Pantech group, while another 35 million shares, representing 4.12% of the enlarged issued share capital, will be made available to shareholders of Pantech.

Pantech's shareholders are entitled to one IPO share of Pantech Global for every 25 existing shares in Pantech.

Meanwhile, a total of 69.98 million IPO shares, representing 8.23% stake in Pantech Global, will be allocated for private placement to selected investors, and a total of 106.25 million IPO shares, or 12.5% stake, will be allocated for private placement to Bumiputera investors approved by the Ministry of Investment, Trade and Industry.

The proceeds to be raised from the public issue will accrue entirely to Pantech Global and is proposed to be utilised for the expansion of operational facilities and the new corporate head office of Pantech Global, capital expenditure for the acquisition of lands and buildings as well as to purchase and upgrade machineries, repayment of bank borrowings, and working capital purposes for factory related expenses.

Alliance Islamic Bank Bhd has been appointed to act as principal adviser to Pantech and Pantech Global for the proposed listing, which is expected to be completed by the first quarter of 2025.

Pantech first announced that it was considering to list PSA and PSI via an SPV in April. In an interview with The Edge Malaysia weekly following the announcement, Pantech said the move was aimed at raising funds for expansion as well as gaining the group recognition as a maker of steel products rather than just a trader.

Pantech shares closed unchanged at RM1.02 on Friday, giving the group a market capitalisation of RM869.45 million. Over the past year, the counter has risen 19 sen, or 22.9%.