Press Metal unit to acquire Hong Kong firm stake via share swap

KUALA LUMPUR: Press Metal Aluminium Holdings Bhd has proposed to sell 25 per cent or 3.86 million of its shares in PT Bintan Alumina Indonesia (PT BAI) to Hong Kong Prime Aluminium Investment Limited (HK PAI) for US$329.80 million (RM1.55 billion).

HK PAI is wholly owned by Nanshan Aluminium International Holdings Ltd (NAIHL).

The exercise is for a share swap of 25.59 per cent interest in NAIHL, which is proposed to be subscribed by Press Metal International Resources (HK) Ltd (PMIRHK), a wholly owned subsidiary of Press Metal Aluminium.

Press Metal said that in consideration of the sale of shares, HK PAI shall issue a promissory note to the company for the amount equivalent to the purchase price.

"The designated purpose of the promissory note is for PMIRHK to assign the promissory note to NAIHL to complete the proposed subscription.

"Upon completion of the disposal, HK PAI will own 25 per cent of the equity interest in PT BAI and Press Metal will cease to hold any direct equity interest in PT BAI,” the company said in a filing with Bursa Malaysia.

It noted that the exercise is expected to result in savings in the company’s capital investment costs for PT BAI as NAIHL would be able to tap into the Hong Kong equity capital market for future fundraising activities, as and when the needs arise.

"We believe that the company's participation in the Hong Kong capital market through its direct shareholdings in NAIHL will be a positive contribution to the company's overall financial liquidity and financial position,” it said.

Following the share swap, Press Metal anticipates that it will continue leveraging on the intangible benefits arising from its investment, with the facilitation of technical capability along the aluminium and alumina production chain, and the ability to improve the cost and capital efficiency of the supply chain.

The share swap is in line with the Press Metal group's expansion initiatives and current growth projection of the world’s primary aluminium demand, it added.

Barring unforeseen circumstances, the proposed share swap is expected to be completed before July 31, 2024. - Bernama