PMB plans to focus on metallic silicon

KUCHING: PMB Technology Bhd, which counts Press Metal Aluminium Holdings Bhd as a major shareholder, is to exit the trading of aluminium extrusion business with the proposed disposal of four companies in Peninsular Malaysia and Sabah for Rm44.39mil.

The group will focus its resources on metallic silicon manufacturing, which has been identified as one of the key pillars of its growth strategy going forward.

PMB Technology’s wholly-owned unit Everlast Aluminium (M) Sdn Bhd has entered into conditional sale and purchase agreements with PMB (Klang) Sdn Bhd for the proposed sale of the entire equity interest in PMB Central Sdn Bhd, PMB Northern Sdn Bhd and PMB Eastern Sdn Bhd for an aggregate cash consideration of Rm43.2mil, PMB Technology said in a filing with Bursa Malaysia.

The companies to be sold are principally involved in trading and marketing of aluminium extrusion products.

PMB Technology has also proposed to dispose of PMB Aluminium Sabah Sdn Bhd to PMB Klang for Rm1.2mil.

PMB Klang is a wholly-owned subsidiary of Press Metal, which is

South-east Asia’s largest integrated aluminium producer.

Press Metal, which is the single largest shareholder of PMB Technology, owns aluminium smelting plants in Samalaju Industrial Park, Bintulu and in Mukah with total annual production capacity of 760,000 tonnes.

The four companies under PMB Technology group are currently sourcing the aluminium extrusion products from Press Metal and its subsidiaries for trading purposes.

According to PMB Technology, the proposals to sell the four companies, which is expected to generate gains of about Rm10mil, is in line with the group’s strategy and plans to streamline its business activities with a clear focus on maximising returns from metallic silicon business.

The company expects the metallic silicon business to be one of the key pillars of its growth strategy that would further enhance its prospects and revenue growth.

PMB Technology has invested some Rm320mil in a silicon manufacturing facility with an annual production capacity of 36,000 tonnes of metallic silicon in Samalaju Industrial Park.

Phase one commenced commercial operations in March.

The company is currently undergoing construction of phase two of the silicon facility which is scheduled for completion in the current quarter. Upon completion, PMB Technology said, this would increase the group’s total combined built-up area dedicated to metallic business operations to 1.245 million sq ft from 630,000 sq ft.

Phase two will double production capacity to 72,000 sq ft.

PMB Technology has financed the phase one project with Rm212.3mil raised from a right issue of five-year 3% ICULS at 100% of its nominal value of RM2.74 each together with about 38.74 million warrants on July 18,2018.

The funding for phase two project, estimated to cost about Rm300mil, included Rm95.45mil proceeds from a private placement exercise completed about three months ago.

On the proceeds of about Rm44.39mil from the sales of the four companies, PMB Technology said the group would utilise up to Rm37.79mil for the purchase of low ash coal and carbon electrodes, which are the main raw materials for the metallic silicon products.

A total of Rm3.07mil is expected to be distributed to the company’s shareholders as special dividend. Up to Rm3.1mil is set aside for working capital to finance the group’s day-to-day operations.

The estimated expenses for the proposed disposals of the four companies is RM430,000.