Prestar aims to raise RM18mil from unit’s IPO
KUALA LUMPUR: Prestar Resources Bhd is targeting to raise RM18mil from the listing of its unit Tashin Steel Sdn Bhd.
Tashin, on its part, is expected to raise about RM38mil from its IPO. It plans to use the proceeds to acquire land, build a factory and for working capital.
Yesterday, Prestar, which owns 51% in Tashin, received shareholder approval to list the latter on the Ace Market of Bursa Malaysia. Post-listing, Prestar’s stake in Tashin will drop to 34%.
“We will use proceeds from the listing to pare down some of Prestar’s borrowings,” said Prestar group managing director Datuk Toh Yew Peng to reporters after the group’s EGM.
He is targeting to list Tashin this year despite the uncertainties in the steel market.
“Last year, the steel price was affected by the trade war between China and the US. We are targeting the price to improve this year and the revival of infrastructure projects would boost the local steel industry,” Toh said.
For the financial year ended Dec 31, 2018 (FY18), Prestar posted a 66% decline in net profit to RM12.6mil from RM43.1mil in FY17.
Revenue for the period was higher by 5% to RM508.2mil compared with RM484.2mil previously.
Tashin’s IPO involves the issuance of 59.33 million new shares in Tashin Holdings. Prestar said the 59.33 million new shares represented 17% of the enlarged share capital in Tashin Holdings.
Of the 59.33 million new shares, 17.45 million will be made available to the Malaysian public via balloting, 8.72 million shares for eligible directors and employees of Tashin and Prestar, 17.45 million shares for entitled shareholders of Prestar while the remaining 15.7 million new shares have been reserved for private placement to selected bumiputra investors.
As part of its listing exercise, the existing shareholders of Tashin Holdings will also make an offer for sale of 55.49 million shares to selected investors.
“The proposed listing of Tashin will enable Prestar to unlock and crystallise the value of its investment since 1999, as well as enhance shareholder value,” Toh said.
Tashin contributes about one third of Prestar’s annual revenue and its core activities are producing steel coils and steel sheets.
Tashin is involved in the manufacturing and trading of steel products, as well as the processing of steel coils into slit coils and steel sheets, catering to the automotive, engineering, manufacturing, and construction sectors.