Malaysia Star reported that Kinsteel Bhd has submitted a proposal to the Securities Commission to list 51% owned unit Perwaja Steel Sdn Bhd on Bursa Malaysia main board.

It said that the flotation would entail the incorporation of Perwaja Holdings Bhd as the holding company of Perwaja Steel via a share swap with 500 million shares in Perwaja Steel issued to Kinsteel 51% and Maju Holdings Bhd 49% respectively. It would also involve the issuance by Perwaja Steel of 156.12 million 10 year 4% irredeemable convertible unsecured loan stocks in Perwaja Steel to Kinsteel at 10 sen per Icul, convertible into 156.12 million new shares in Perwaja Steel at a conversion price which represents the initial public offering price via tendering of one Icul and the balance in cash.

This would be followed by the public issue of 60 million new Perwaja Steel shares and an offer for sale of 90 million shares in Perwaja Steel by Equal Concept Bhd, a subsidiary of Maju and Kinsteel at IPO price to be determined later.

Mr Tan Sri Abu Sahid Mohamed non executive chairman of Kinsteel and executive chairman of Perwaja Steel in the statement said that “It is time to list Perwaja Steel to benefit shareholders following the success of the strategic alliance between Maju and Kinsteel. The flotation would allow Kinsteel to grow its downstream activities of manufacturing sections, bars, wire rods and bolts and nuts.”

Mr Tan Sri Pheng Yin Huah MD of Kinsteel and Perwaja Steel said that Kinsteel would continue to be an integrated steel manufacturer post listing. He added that the Perwaja Steel listing would allow the segregation of its core business. He said “The injection of capital raised from the listing of Perwaja Steel was expected to provide the company the opportunity to expedite future projects that would be earnings enhancing.”