Millcon will issue 300m shares for working capital

SET-listed steel maker Millcon Steel Plc will increase its capital via 300 million ordinary shares for private placement.

Funds raised will be used for working capital, debt repayment and enhancing operational efficiency.

Director Jureerat Lapanavanich said an executive committee meeting on Thursday decided to offer 300 million newly issued ordinary shares at 1.40 baht apiece to Bangkok Bank Plc.

“The price of 1.40 baht apiece is not lower than 90% of the market price, calculated by the weighted average of the company’s share price over seven consecutive business days,” Ms Jureerat said.

She said the capital increase complied with a previous agreement made by the executive committee.

In the previous executive meeting, the company approved plans to increase capital by allocating no more than 500 million ordinary shares for at least 90% of the company’s market price calculated by a weighted average over seven to 15 consecutive business days, Ms Jureerat said.

She said the 300 million shares were 7.4% of the total and would make existing shares lose about 1% of their value.

“The 300 million shares increases the company’s total to 4.05 billion shares,” Ms Jureerat said.

After the share offering, the company’s top shareholder will remain concrete materials maker General Engineering Plc with 729 million shares or 18%.

Sittichai Leeswadtrakul is the secondbiggest shareholder with 703 million shares or 17.3%, while Nathatai Sawatyanon has 122 million shares or 3%.

Millcon is one of many Thai steel makers suffering from falling global steel prices due to China dumping massive amounts of cheap steel on world markets.

Thailand’s anti-dumping law takes time for enforcement, forcing local steel makers to diversify and produce higher grades of steel to survive.

Millcon recently signed a memorandum of understanding with Japanese giant Kobe Steel Ltd on a joint venture to produce special-grade wire rods in Thailand.

The venture is expected to provide wire rods for the growing Thai automotive industry and throughout Asean.

The company has also expanded into Myanmar, with operations to start next year after being granted a licence to invest in a special economic zone.

It will build a factory to make steel for construction and prefabricated concrete materials in the Thilawa Industrial Estate.

MILL shares closed yesterday on the SET at 1.37 baht, up 16 satang, in trade worth 30.9 million baht.