Mestron to raise RM25.28m from listing on ACE Market

From left: Gary Ting, head of corporate finance of M&A Securities Sdn Bhd; Gary Loon, executive director of Mestron Holdings Bhd; Por Teong Eng, managing director of Mestron Holdings Bhd; Datuk Bill Tan, managing director of corporate finance of M&A Securities Sdn Bhd; and Mr Danny Wong, deputy head of corporate finance of M&A Securities.

KUALA LUMPUR: Steel pole maker Mestron Holdings Bhd plans expects to raise RM25.28mil as it seeks to list on the ACE Market of Bursa Malaysia.

The company said on Thursday it would use RM13mil of 51.4% of the proceeds from the initial public offering (IPO) to expand its main manufacturing plant and purchase machinery.


The will also use RM5.18mil (20.5%) to purchase raw materials such as steel plates and steel pipes; RM4mil (15.8%) to repay bank borrowings and the remaining RM3.10mil (12.3%) to defray listing expenses for the IPO.
 
Mestron managing director Por Teong Eng said the proposed expansion of its factory would increase the production capacity of steel poles by about 5,700 tonnes per annum to about 11,400 tonnes per annum. 

The move would also enable Mestron to focus on high mast poles and telecommunication monopoles, he said at the launch of the prospectus.

Por said the company wanted to expand its sources of income as the gross profit margin for specialty poles was higher than the margin for standard street light poles.

Under the floatation exercise, Mestron is issuing 158.0 million new shares at 16 sen per share.

Of that, 39.50 million new shares would be for the public via balloting; 8.75 million shares for its eligible directors and employees while 30.75 million shares would be placed out and the remaining 79 million shares would be placed out to placement to approved Bumiputera investors.
 
As part of its listing exercise, the shareholders will also place out 79 million shares to selected investors.
 
Based on the enlarged share capital of 790 million shares, Mestron is expected to have a market capitalisation of RM126.40mil.
 
The IPO is open for subscription from Thursday until June 3.

Mestron’ listing is tentatively scheduled for June 18. 

M&A Securities Sdn Bhd is the adviser, sponsor, underwriter and placement agent for the IPO.