From left: Pantech Global Bhd group executive director Lim Soon Beng, group managing director Adrian Tan, non-independent, non-executive chairman Datuk Jimmy Chew and deputy group managing director Kong Chiong Lee.
KUALA LUMPUR: Pantech Global Bhd is not expected to be affected by US President Donald Trump’s plan to impose a 25 per cent tariff on all steel and aluminium imports.
Its group managing director, Adrian Tan, said the proposed 25 per cent tariff on steel and aluminium imports would be uniformly applied to all countries, thereby creating a level playing field.
"If every country is at 25 per cent, all things will be equal, and it will make no difference to us,” he told reporters after the group’s prospectus launch today.
Pantech Global manufactures and exports butt weld pipe fittings and stainless steel welded pipes that can withstand high temperatures, high pressure, corrosive substances and harsh environments.
The products are used in various industries involving fluid transmission, including oil and gas, petrochemical, chemical, semiconductor, water treatment, and shipbuilding.
Additionally, Tan noted that the specifics of the tariff plan remain unclear and are quite general and said such tariffs typically target upstream steel and aluminium producers, whereas Pantech Global operates in the downstream sector.
On Sunday, Trump announced his plan to formally impose tariffs on steel and aluminium imports, as well as reciprocal tariffs on countries that levy duties on US goods.
Meanwhile, Pantech Global aims to raise approximately RM178.32 million through its initial public offering (IPO) ahead of its listing on the Main Market of Bursa Malaysia on March 3. The listing marks the first IPO on the Main Market in 2025.
The IPO entails the issuance of 262.23 million new ordinary shares at an issue price of 68 sen per share. Based on the enlarged issued share capital of 850 million shares and at the IPO price, it will have a market capitalisation of RM578.00 million upon listing.
A retail tranche of 21.25 million IPO shares is made available for application by the Malaysian public.
In total, the IPO offers investors a 30.85 per cent stake in the company, with the remainder to be held by the Main Market-listed parent company, Pantech Group Holdings Bhd
.
Pantech Global plans to use 37.75 per cent or RM67.32 million of the proceeds for business expansion and 36.27 per cent (RM64.68 million) for capital expenditure, to establish a new factory to broaden its range of fittings production, and to build its corporate head office in Selangor.
It will also set up a new warehouse in Johor to improve fulfilment and set up a new pickling facility to accommodate longer pipes.
Tan said the group is acquiring its rented factory in Klang and operational land in Johor as part of the chain listing.
"We also plan to purchase, upgrade and replace machinery and equipment as well as components to enhance production capabilities and efficiency including new automated machines,” he said.
For the remainder of the proceeds, 12.74 per cent (RM22.72 million) will be utilised as working capital, 8.41 per cent (RM15 million) to repay bank borrowings, and 4.83 per cent (RM8.6 million) to defray listing expenses.
Pantech Global mainly serves customers in the US, Malaysia, Taiwan, Indonesia, Canada, and Europe, which collectively accounted for 93.80 per cent and 92.01 per cent of its total revenue for the financial year ended Feb 29, 2024, and the first six months ended Aug 31, 2024, respectively.
In 2023, Pantech Global commanded 66 per cent of Malaysia’s export market share for butt weld pipe fittings and 16 per cent of Malaysia’s production market share for stainless steel welded pipes.
Alliance Islamic Bank Bhd is the principal adviser, underwriter, and placement agent for Pantech Global’s IPO exercise. - Bernama
