Mestron aims to raise RM25.28m

Steel pole maker Mestron Holdings Bhd expects to raise RM25.28 million from its proposed listing on Bursa Malaysia’s ACE Market.

The company plans to use RM13 million, or 51.4 per cent, of the proceeds from the initial public offering (IPO) to expand its main manufacturing facility and purchase manufacturing machinery and equipment.

It will use RM5.18 million (20.5 per cent) to buy raw material such as steel plates and steel pipes to support its expansion in capacity, RM4 million to repay bank borrowings and the remaining RM3.1 million to defray listing expenses for the IPO.

Mestron managing director Por Teong Eng said the expansion of its main manufacturing facility would increase the company’s production capacity of steel poles by 5,700 tonnes a year to 11,400 tonnes.

It will enhance Mestron’s manufacturing capability for specialty poles, particularly high mast poles and telecommunications monopoles.

“This is in line with the company’s business strategy to expand its revenue stream, from specialty poles to high mast and telecommunications monopoles, as the gross profit margin for specialty poles is relatively higher than that for standard street light poles,” he said.

Under the listing exercise, Mestron is issuing 158 million new shares at 16 sen each.

Of this, 39.5 million new shares will be made available to the public via balloting, 8.75 million new shares for eligible directors and employees and 30.75 million new shares by way of private placement to selected investors.

The remaining 79 million new shares are earmarked for private placement to identified Bumiputera investors approved by the International Trade and Industry Ministry.

Its existing shareholders will make an offer for sale of 79.0 million shares by way of private placement to selected investors.

Based on the enlarged share capital of 790.0 million shares, Mestron is expected to have a market capitalisation of RM126.4 million.

The IPO was opened for subscription yesterday and will end on June 3.

Mestron supplies steel poles to high-profile construction projects such as East Klang Valley Expressway, Coastal Highway Southern Link, Light Rail Transit Ampang line extension, Sungai Buloh-Kajang Mass Rapid Transit and Bukit Jalil Sport Complex refurbishment.