STC unit to offer 19.9m shares in IPO

Written by Financial Daily
Wednesday, 07 October 2009 10:37

KUALA LUMPUR: Success Transformer Corporation Bhd’s (STC) subsidiary Seremban Engineering Bhd (SEB) will undertake a public issue of 19.93 million new shares, representing 24.91% of its enlarged paid-up capital pursuant to its proposed listing on the Main Market.

In a statement yesterday, STC said it had submitted the applications to the relevant authorities to seek their approvals for the proposed flotation exercise involving an enlarged paid-up capital of RM40 million comprising 80 million shares of 50 sen each.

It said of the IPO shares, a total of 9.93 million, or 12.41% of the enlarged paid-up capital, would be reserved for bumiputera investors approved by the Ministry of International Trade and Industry by way of private placement.

SEB group’s eligible directors and employees, and persons who have contributed to the success of the group will be offered 3.5 million shares, while another 6.5 million shares will be offered to the public. STC said the issue price would be determined later after getting the approvals from the relevant authorities for the proposed listing.

Simultaneous with the proposed public issue, STC itself will make a restricted offer for sale of 8.07 million shares, representing 10.09% of SEB’s enlarged paid-up capital.

Of these, eight million shares will be reserved for STC shareholders on the basis of one SEB share for every 15 shares of 50 sen each held in STC, while 72,000 shares will be reserved for bumiputera investors approved by the ministry.

Prior to the IPO, SEB proposed a bonus issue of 58.07 million shares of 50 sen each on the basis of about 2,904 bonus shares for every 100 existing shares.

STC said the proceeds from the public issue would be used for the purchase of property, plant and equipment, for repayment of borrowings, as working capital and to defray expenses. It expects the listing exercise to be completed by the first quarter of next year.

RHB Investment Bank has been appointed as the principal adviser, managing underwriter and placement agent for the proposed flotation.

SEB group is involved in the fabrication of process equipment such as unfired pressure vessels, non-pressurised tanks and heat exchangers; metal structures such as plant fabrication and installation, steel structures, piping and ducting systems and other products and services; and the provision of maintenance and shutdown services.

For the six months to June 30, 2009, SEB group posted an unaudited net profit of RM4.52 million on the back of revenue totalling RM36 million. It posted an audited net profit of RM7.88 million and revenue of RM62 million in FY08.