KUCHING:PMB Technology Bhd (PMBT)’s rights issue has been over-subscribed 12.45 per cent or 30,349,050 shares.
On closing date of acceptance on November 8, 2024, the company received total valid acceptance of 238,367,286 rights shares (97.81%) and total valid excess applications of 35,686,590 shares (14.64%), bringing to total 274,053,876 rights shares (112.45%).
“The total number of rights shares available for subscription is 243,704,826 shares, resulting in an over-subscription rate of 12.45%,” PMBT said in a filing with Bursa Malaysia.
The company said the excess rights shares have been allotted in accordance with the basis stated in the Abridged Prospectus dated October 23, 2024.
The rights shares, which are priced at RM1.27 each, are issued on the basis of three rights shares for every 20 existing PMBT shares. The rights shares are expected to be listed and quoted on Bursa Malaysia on November 22, 2024.PBMT shares closed at RM1.65 on Friday.
The rights issue undertaken on a full subscription basis will raise gross proceeds of about RM309.5 million.
According to company’s chief executive officer Datuk Koon Poh Ming, the proceeds from the rights issue will be utilised for repayment of bank borrowings within six months. As at October 3, 2024, PMBT group had total bank borrowings of RM949.4 million.
“In an effort to reduce the gearing level and financing costs, our group intends to repay its bank borrowings comprising term loans, trade facilities and revolving credits to various financial institutions/lenders. The potential interest savings from the repayment is approximately RM15.9 million per annum based on interest rates ranging from 4.31% to 6.52%.
“Approximately RM210 million of the borrowings were used to finance the expansion of Phase 3 of the metallic silicon plant (in Samalaju Industrial Park, Bintulu) which is currently under testing and commissioning and is expected to commence production by the second half of 2024.
“Alongside with both Phase 1 and Phase 2 (combined capacity of 72,000 tonnes per annum) which are both in operations now, our group’s combined annual installed capacity will be at 108,000 metric tonnes with a total power of 129 megawatts,” he said in a circular to shareholders in relation to the proposed rights issue in September.
Koon said the Phase 3 expansion of the plant is expected to increase operational efficiency by leveraging work force and raw material management as the group will be able to secure larger quantities of raw materials at a lower price in order to achieve a greater economy of scale in production and to remain competitive in the global market.
With the increased demand for sustainability and traceability and the increasing solar panel installation, especially from the western market, he said the group is well positioned to increase its supply to this market in the near future.
Last month, PMBT issued 24 million new ordinary shares priced at RM2.3177 per share to Japan’s Hanwa Co Ltd under a private placement exercise. Hanwa, a client of PMBT, is involved in the business of domestic and import-export of steel products, steelmaking raw materials, metal scraps and others.
On September 6, 2024, PMBT said it would undertake a proposed private placement of up to two per cent of the company’s total number of issued shares (excluding treasury shares) or about 32 million new ordinary shares.
Based on an illustrative issue price of RM2.0176 per placement share, the exercise is expected to raise about RM64.59 million. Proceeds of the private placement will be utilised for repayment of bank borrowings and as the group’s working capital requirements.
Besides metallic silicon manufacturing, PMBT group is a major aluminium ladder manufacturer in Malaysia.
