KUALA LUMPUR: Steel pole maker Mestron Holdings Bhd expects to raise RM25.28 million through its proposed listing on the ACE Market of Bursa Malaysia.
The company plans to use RM13 million (51.4%) raised from the initial public offering (IPO) to expand its main manufacturing facility and acquire more manufacturing machineries and equipment for future business growth.
It will further utilise RM5.18 million (20.5%) for working capital to purchase raw materials such as steel plates and pipes to support its expansion in capacity; RM4 million (15.8%) to repay bank borrowings while the remaining RM3.1 million (12.3%) to be used to defray listing expenses for the IPO.
Mestron managing director Por Teong Eng said the expansion of its main manufacturing facility will increase the company’s production capacity of steel poles by 5,700 metric tons (MT) to 11,400 MT per annum. It will also enhance Mestron’s manufacturing capability for specialty poles particularly, high mast poles and telecommunication monopoles.
“This is in line with our business strategies to expand the company’s revenue stream from its specialty pole business segment particularly high mast and telecommunication monopoles as the gross profit (GP) margin for specialty poles is relatively higher than the GP margin for standard street light poles,” he said in a statement.
Under the listing exercise, Mestron is issuing 158 million new shares at 16 sen per share of which 39.5 million new shares will be made available to the Malaysian public via balloting; 8.75 million new shares for its eligible directors and employees; 30.75 million new shares by way of private placement to selected investors while the remaining 79.0 million new shares are earmarked for private placement to identified bumiputra investors approved by the Ministry of International Trade and Industry.
As part of its listing exercise, the existing shareholders of the company will also make an offer for sale of 79 million shares by way of private placement to selected investors.
Based on the enlarged share capital of 790 million shares, Mestron is expected to have a market capitalisation of RM126.4 million and its listing is tentatively scheduled on June 18, 2019.
