KUALA LUMPUR: Hiap Teck Venture Bhd (HTVB) has agreed to subscribe for 54.6 million new shares worth RM53.24 million in 27.3 per cent-owned joint venture Eastern Steel Sdn Bhd (ESSB) which is seeking to raise RM195 million via a proposed rights issue.
HTVB said it signed a share subscription agreement today with ESSB as well as the other shareholders of the Terengganu-based ESSB -- namely, Shanxi Jianlong Industry Company Ltd (68.8 per cent stake) and Chinaco Investment Pte Ltd (3.9 per cent) -- and Shanxi Jianlong’s sister company Jianlong Holdings Sdn Bhd.
"ESSB’s proposed rights issue entails the issuance and allotment of 200 million new ordinary shares at RM0.975 each for a total consideration of RM195 million to be proportionately subscribed by the existing shareholders of ESSB, namely Shanxi Jianlong, HTVB and Chinaco,” it said in a filing with Bursa Malaysia today.
HTVB said the gross proceeds of RM195 million would be used for capital expenditure, including a 1,450 mm hot rolling mill being constructed by ESSB, and working capital requirements.
On its targeted completion in September 2024, the mill will have an annual rolling capacity of 2.58 million metric tonnes of hot rolled coil.
HTVB said the subscription amount of RM53.24 million would be funded via internally generated funds and/or external borrowings.
The proposed subscription is expected to be completed by Dec 31, 2023.
Shanxi Jianlong has designated Jianlong Holdings to subscribe for its entitlement to the proposed rights issue. - Bernama