KUALA LUMPUR (Sept 26): Steel Hawk Bhd (KL:HAWK), which debuted on the ACE Market in September last year, has proposed a special issue of up to 70 million new shares to meet its Bumiputera equity requirement.

The new shares represent about 14.29% of its existing share capital, or 12.5% of its enlarged share capital. As at Sept 3, Steel Hawk’s issued share capital stood at RM20.25 million, comprising 490 million shares. 

Under Bursa Malaysia’s listing rules, the company must allocate at least 12.5% of their shares to Bumiputera investors within one year after meeting the Main Market profit requirements approved by the Ministry of Investment, Trade and Industry, or within five years of listing.

In an announcement to Bursa Malaysia, Steel Hawk said the illustrative issue price is assumed at 41.95 sen per share, which could raise gross proceeds of up to RM29.13 million. The funds will be used for working capital, repayment of bank borrowings, and defrayment of expenses.

Since Sept 11 last year, the oil and gas (O&G) support services provider has secured about eight new and extension contracts, including from Petroliam Nasional Bhd (Petronas) and Petra Energy Bhd (KL:PENERGY). Its outstanding fixed contract value amounts to roughly RM100 million, alongside 14 ongoing call-out contracts with no fixed value.

On prospects, the company said it is well positioned to tap growth in Malaysia’s O&G services and equipment industry, despite challenges such as crude oil price volatility and global supply chain disruptions.

“Petronas has maintained its focus on sustaining and expanding Malaysia's O&G production through continued capital expenditure and investments in exploration, development, and production activities. This ongoing industry investment presents opportunities for the group to strengthen its market presence in all segments, namely upstream, midstream and downstream,” it said. 

“The board remains focused on executing secured contracts while pursuing growth in the group's onshore and offshore support services for the O&G industry. The progressive revenue recognition from the group's existing order book is expected to provide earnings visibility for the next five years,” it added. 

Of the gross proceeds, RM16.93 million has been earmarked for raw material purchases and administrative and operating expenses, while about RM12 million will partially repay outstanding bank overdrafts of RM13.04 million. 

As at end-June, the company’s total borrowings, comprising term loans, hire purchase liabilities, trade financing and overdrafts, stood at RM42.7 million.

The proposed special issue is expected to be completed by the fourth quarter of this year, with UOB Kay Hian appointed as the adviser and placement agent. 

At Friday’s noon break, shares of Steel Hawk settled one sen or 3.08% lower at 31.5 sen, valuing the company at RM154.35 million.