Press Metal sells 20% stake in Press Metal Bintulu to Summit Global Management
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Press Metal Bhd is selling 20% of its stake in Press Metal Bintulu Sdn Bhd to Summit Global Management XII. SGM is a 70 per cent owned subsidiary of Sumitomo Corporation.
Press Metal reported that the proposed sale of shares will provide an opportunity to realize the value of its investment in Press Metal Bintulu at a good valuation. The company said that the stake sale will gain about RM341.693 million for the company.
The company added that the amount raised from the proposed sale will be partially used to repay short-term bank loans and to finance the compulsory early redemption of its 2011/2019 redeemable convertible secured loan stocks RCSLS. It hopes to improve its credit ratings and provide support to overall operations with the help of this disposal.
The company also added that Sumitomo will become a major shareholder and strategic partner of Press Metal Bintulu after the corporate exercise gets over.
They believe that this transaction will help them realize collaborations with Sumitomo Group, one of the world’s largest trading company for the primary aluminium metal and a top one in Japan and Asia. They expect to capitalize on its international networking and marketing expertise to realize Press Metal Bintulu’s full potential.
At present, Press Metal Bintulu’s existing manufacturing facilities at its Samalaju smelting plant can produce 320,000 MT of aluminium ingots per year. Press Metal said that after the disposal of shares Press Metal will consolidate 80% of the financial results of Press Metal Bintulu which will eventually reduce its earnings contribution.
Press Metal Bintulu earned revenue of about RM127.86 million during FY ended in 2012, representing 5.64% of the total revenue of Press Metal. Nevertheless, Press Metal Bintulu incurred loss after tax of about RM1.58 million for the same period.
According to an unaudited financial statements for the nine months ending in September 2013, Press Metal Bintulu earned revenue of about RM978.44 million, contributing 42.28% to Press Metal group.
Press Metal Bintulu has contributed to Press Metal group’s profit after tax of about RM55.65 million for the nine months ending in September 2013.
Sumitomo also bought a 20 per cent equity interest in Press Metal Sarawak Sdn Bhd in December 2010. They added that its aluminium smelter at Mukah, Sarawak produces about 115,000 metric tonne (MT) of aluminium ingots and billets per year. Press Metal Bhd holds the rest 80% equity interest of Press Metal Sarawak.
