Posted on 10 Dec 2020
Electric arc furnace (EAF) steelmaker Malaysia Steel Works (Masteel) has announced plans for a stock shares issue with five-year warrants designed to raise up to $20 million.
The steel bar producer says the proceeds will be used “for working capital, repayment of bank borrowings and to defray expenses for corporate exercise.
“We are witnessing an upcycle in steel demand within both the local and regional markets, as governments prioritize high-multiplier infrastructure developments and construction projects to stimulate economic growth,” says Dato’ Sri Tai Hean Leng, managing director and CEO of Masteel.
“This is clearly advantageous for established steel manufacturers like us who have both capacity and competitiveness to reap the benefits of this recovery,” he continues. “To this end, our recent capital expenditure investments in employing the latest steel melting technology will optimize our cost-efficiency. As the proposed rights issue proceeds are mainly used for working capital, it will further enhance our financial footing that will allow us to focus on enhancing our capabilities to capture new opportunities.”
In January 2020, Malaysia’s Ministry of International Trade and Industry (MITI) enforced an anti-dumping duty on steel products from Singapore and Turkey, which Masteel says “gradually alleviated the issue of steel products oversupply in the Malaysian market.”
Adds the firm, “In line with these positive developments, Masteel expects to commission a third manufacturing plant in the first quarter of 2021, [which] would increase productivity and expand the versatility of the Group’s product range to eventually include alloy and stainless steel.”
Masteel says the Malaysian construction sector is expected to rebound by 13.9 percent in 2021 because of “the acceleration and revival of major infrastructure projects.” Malaysia’s GDP is expected to rebound between 6.5 percent and 7.5 percent in 2021, adds the firm.
Source:Recycling Today
