Posted on 09 Dec 2020
Malaysia Steel Works has issued a plan to issue new shares to replenish its working capital amidst a bullish market. The company says it is well placed to benefit from recovering demand due to recent investments, Kallanish notes.
The company aims to offer one new share for every two existing shares, and to raise up to MYR 81.5 million ($20m). The shares would include detachable five-year warrants. It adds that MYR 10m of this would go to paying down debts, MYR 2.5m to covering expenses for the issuance, and MYR 69m would go to working capital requirements.
Malaysia Steel Works returned to a net profit of MYR 3.765m in the third quarter, although this was still down from a profit of MYR 10.078m a year earlier. That narrowed its losses over the year to MYR 22.938m, compared to a loss of MYR 8.993m over January-September 2019.
In its report for the period it noted that Malaysia’s national budget forecasts for 2021 include a 13.9% expansion of the construction sector. Malaysia, and much of the region, is planning infrastructure investment to boost the economic recovery post Covid-19.
The steelmaker runs an electric arc furnace billet meltshop and bar rolling mill. A boost to working capital may allow it to better react to soaring scrap costs over the coming year.
Source:Kallanish
