Public Investment Bank – The new advisor to Press Metal’s shareholders

Press Metal Bhd has named Public Investment Bank Bhd as independent adviser to non-interested directors and shareholders on a proposed exemption sought by its major shareholder Alpha Milestone Sdn Bhd (AMSB) and persons acting-in-concert (PACs) from the Securities Commission (SC) to overtake the remaining company shares and convertible securities not owned by them after the conversion of more than RM233.9mil nominal value of eight-year 6% redeemable convertible secured loan stocks.

The Koon brothers are directors and substantial shareholders of Press Metal as well as AMSB. In a filing with Bursa Malaysia, (Maybank IB) said the appointment of Public Investment Bank is conditioned by the approval of the Maybank Investment Bank Bhd and SC. Maybank IB is Press Metal adviser on the proposed exemption.

AMSB and its PACs together have 42.87% equity interest in Press Metal, the owner of aluminium smelting plants in Mukah and Bintulu. On Jan 6, Press Metal said in an announcement AMSB and Ong intended to convert the nominal value of RCSLS into about 106.3 million shares of Press Metal.

The conversion would result in a mandatory general offer for the remaining Press Metal shares and convertible securities which are not owned by AMSB and its PACs under the Malaysian Code on Take-Overs and Mergers 2010.

Maybank IB said as AMSB and its PACs had no intention of undertaking the mandatory general offer, they were seeking an exemption from the mandatory offer obligation under the provisions of the Code.

“The proposed exemption will allow AMSB and Ong Soo Fan to convert all their 2011/2019 RCSLS, resulting in an increase in the enlarged share capital of the company, thus reducing the gearing levels of Press Metal group and improve Malaysian Rating Corporation Bhd (MARC)’s rating of the 2011/2019 RCSLS,” said the investment bank.

MARC had recently downgraded its rating of Press Metal Bhd due to the slow business and financial position of Press Metal along with the subsidiaries, resulting partly from the continually falling aluminium price and result of debt-financed expansion in relation to the construction and development of the aluminium smelting plant in Samalaju Industrial Park, Bintulu.