MESTRON TO RAISE RM25.28 MLN VIA IPO ON BURSA'S ACE MARKET

KUALA LUMPUR, May 23 (Bernama) -- Steel pole maker, Mestron Holdings Bhd aims to raise RM25.28 million from its initial public offering (IPO) at 16 sen per share on Bursa Malaysia Securities’ ACE Market come June 18, 2019. 

Managing director Por Teong Eng said the company planned to use RM13.0 million (51.4 per cent) raised from the IPO to expand its main manufacturing facility and acquire more manufacturing machinery and equipment for future business growth.

Besides that,  about RM5.18 million (20.5 per cent) would be utilised as working capital to purchase raw materials such as steel plates and steel pipes to support its capacity expansion, RM4 million (15.8 per cent) to repay bank borrowings and the remaining RM3.10 million (12.3 per cent) to cover IPO expenses.

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"The expansion of our main manufacturing facility will increase the company's production capacity of steel poles by 5,700 metric tonnes (mt) per annum to 11,400 mt per annum. 

"It will also enhance Mestron's manufacturing capability for speciality poles particularly, high mast poles and telecommunication monopoles," he said at the launch of the company's prospectus here today.

Meanwhile, executive director Gary Loon Chin Seng told a press conference that the company remained positive on its outlook, especially in the infrastructure sector given that the government had recently announced effort to use light-emitting diodes (LED) for street lights in stages, a move to encourage energy saving. 

"Currently 70 to 80 per cent (of street lights) are still using old technology, (and) this is a huge opportunity for us to tap into as it would require changing of lanterns and poles.

"Besides that, the rising urbanisation within the country and the long term growth in residential, commercial and industrial developments will also require street lighting products to illuminate roads and walkways including more speciality poles to be erected to allow accessibility to broadband," said Loon.

Asked on the timing of its listing which is happening amid the trade tension between US and China, Loon said its business would not be affected as 85 per cent was for domestic consumption while the remaining was exported to Singapore, Australia, Maldives, Sri Lanka and Brunei.

"We are fortunate that Singapore and Australia have no direct impact from the trade tension.

"Also, for this year we are intensifying our marketing efforts in Brunei and Sri Lanka, as well as new markets like New Zealand," he said.

-- BERNAMA