Kinsteel ... July 2008

Kinsteel Bhd will be able to reap up to RM97 million cash raised from the proposed listing of Perwaja Holdings Bhd.

However, Kinsteel would not undertake a capital repayment exercise for its shareholders, as the proceeds raised would be use to develop its downstream steel mills and other capacity expansion activities.

Pheng, who is also the son of Kinsteel’s managing director Tan Sri Pheng Yin Huah, said post-listing of Perwaja Holdings, there would be no changes to the shareholding structure of Kinsteel’s major shareholders.

Kinsteel will still own 37% in Perwaja after the listing, which will allow the company to reap high returns from Perwaja’s operations. Kinsteel would have the option to up its stake in Perwaja Holdings to 51% by converting its irredeemable convertible unsecured loan stock (ICULS) of 10 sen a piece. Kinsteel do not plan to convert them to stocks immediately, as they can do that within 10 years’ time.

Kinsteel also owns 51% stake in Perwaja Gurun, which is not part of Perwaja Steel Sdn Bhd.