The Philippine Stock Exchange (PSE) has approved the additional share issue of local steel giant TKC Steel Corp.’s worth up to P2.9 billion.
TKC will sell 235 million of its common shares at a price ranging from P8 to P11.50 each.
The firm’s listed shares in the PSE comprise five percent of TKC’s total issued and outstanding stock. With the issuance of additional shares, the stock’s public float will increase to 25 percent.
First Metro Investment Corp. has been designated issue manager and lead underwriter for the follow-on offering of shares slated this month.
Proceeds from the issue will be used by to acquire new facilities and improve the operations of TKC’s two subsidiaries — Treasure Steelworks Corp,. which operates the largest billet-making plant in the country in terms of installed capacity and Zhang Zhou Stronghold Steel Works Co. Ltd., a manufacturer of steel pipes in the southeastern Chinese province of Fujian and a distributor to China and other export markets.
Other proceeds will go to repayment of a P200-million short-term bank loan which will mature in January next year.
TKC earlier signed a deal with a China-based import and export company, Xiamen Xindeco Ltd., to supply the country’s first blast furnace to instantly double the production capacity of the company’s local plant from 300,000 metric tons to 600,000 metric tons per annum.
For its international operations, TKC is setting aside P1.6 billion out of the expected total proceeds from the offering for the expansion of Zhang Zhou in a bid to meet the rising demand for spiral pipes.
Zhang Zhou is seeking to double its production capacity from 40,000 metric tons to 80,000 metric tons with the addition of another production line that will be fully operational in the first quarter of 2008.
TKC president Anthony Dizon said the rising demand for steel has prompted the company to further expand its existing capacity.