Particulars of substantial Securities Holder

Details of changes

马钢铁工程（隆）（MASTEEL，5098，工业产品组）计划向麦格理银行（Macquarie Bank Ltd）出售4250万股新股，以筹集现金并减低债务。

这家钢筋制造商致函大马交易所表示，新股售价38仙，并在未来12个月内分几批出售。

若以拟议中的发行价计算，它将可筹集1615万令吉的资金。

在筹集的资金中，1598万令吉将用于偿还其贸易贷款。

马钢铁工程说：“拟议中的私下配股将减少我们现有的贸易贷款，从而使我们能够节省融资成本。”

We refer to the announcements dated 13 September 2019 and 17 September 2019 in relation to the Proposed Private Placement. Unless otherwise defined, the definitions set out in the previous announcements shall apply herein.

On behalf of the Board, UOBKH wishes to announce that Bursa Securities has, vide its letter dated 19 September 2019, resolved to approve the listing and quotation of up to 42,500,000 new ordinary shares to be issued pursuant to the Proposed Private Placement subject to the following conditions:-

1. Masteel and UOBKH must fully comply with the relevant provisions under the Listing Requirements pertaining to the implementation of the Proposed Private Placement;
2. Masteel and UOBKH to inform Bursa Securities upon the completion of the Proposed Private Placement;
3. Masteel to furnish Bursa Securities with a written confirmation of its compliance with the terms and conditions of Bursa Securities’ approval once the Proposed Private Placement is completed; and
4. Masteel must submit to Bursa Securities details of the placees in accordance with Paragraph 6.15 of the Listing Requirements as soon as practicable before the listing of the new shares to be issued pursuant to the Proposed Private Placement.

This announcement is dated 19 September 2019.

Particulars of Director

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Particulars of substantial Securities Holder

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Particulars of substantial Securities Holder

Details of changes

Particulars of substantial Securities Holder

Details of changes

By Ahmad Naqib Idris

KUALA LUMPUR (Sept 13): Malaysia Steel Works (KL) Bhd (Masteel) has proposed a private placement of up to 42.5 million shares to Macquarie Bank Ltd, as the group looks to raise cash to repay its bank borrowings.

In a filing with the bourse, Masteel said it had entered into a conditional share subscription agreement with Macquarie Bank, in relation to the issuance of up to 42.5 million placement shares, which represent about 10% of its total number of issued shares.

The group said the placement is expected to be implemented in multiple tranches within 12 months from the date on which the conditions precedent in the subscription agreement are fulfilled.

The agreement entails Macquarie Bank’s right to initially subscribe for up to 25.5 million placement shares for the first tranche and the conditional right to further subscribe for up to 17 million placement shares for the second tranche.

Masteel said the subscription price of each placement share will be equal to 91% of the volume weighted average price of its shares during the five consecutive trading days immediately preceding the subscription date.

Assuming an indicative issue price of 38 sen per share, the exercise would be able to raise RM16.15 million in proceeds, of which some RM15.92 million will be used to repay borrowings from Kuwait Finance House (Malaysia) Bhd, while the balance of the funds will be used to cover estimated expenses for the exercise.

“After considering various fund-raising options, the board has decided to pursue the proposed private placement as it will enable us to raise funds expeditiously and in a cost efficient manner.

“In addition, the proposed private placement will reduce our existing trade lines, thus allowing us to save on finance cost. The proposed private placement to be implemented via the subscription agreement will also serve to enhance trading liquidity of Masteel’s shares,” said the group.

Upon completion of the placement, Masteel’s share capital will grow to 468.06 million shares or RM244.92 million, from 427.24 million shares or RM230.09 million.

Masteel’s share price fell one sen or 2.35% to close at 41.5 sen, giving a market capitalisation of RM177.3 million.

KUALA LUMPUR:  (Masteel) plans to place out 42.5 million new shares to Macquarie Bank Ltd to raise cash and reduce its debts.

The new shares will be sold at 38 sen each, spread over in several tranches over the next 12 months, the steel bar maker said in a filing with Bursa Malaysia today.

As the proposed issue price, Masteel will raise RM16.15mil.

Of the amount, RM15.98mil will be utilise towards repayment of its trade lines.

“The proposed private placement will reduce our existing trade lines, thus allowing us to save on finance cost,” Masteel said.

We refer to the Company’s announcement dated 30 August 2019 and query letter from Bursa Malaysia Securities Berhad to Company dated 4 September 2019 pertaining to the above matter.

The terms herein shall bear the same meaning as defined in the said announcement.

The Board of Directors of the Company wishes to provide the following additional information:-

1. The date of presentation of the Writ of Summons and Statement of Claim.

The Writ of Summons was issued or presented on 17 July 2019. The Statement of Claim dated 12 June 2019, which was endorsed on the Writ of Summons, was filed on 17 July 2019 by the solicitors of Safety Capital Sdn Bhd (“the Plaintiff”)

2. The date the Writ of Summons and Statement of Claims were served on MASTEEL.

The Writ of Summons and Statement of Claim were received by MASTEEL on 19 July 2019.

3. The interest rate for the total payment of RM10,681,000.

The rate of interest, is at a rate that will be determined from time to time by the Chief Justice. The current rate is 5% per annum and is calculated from the date Judgment is delivered in favour of the Plaintiff, if successful.

4. The details of the circumstances leading to the filing of the Writ of Summons and Statement of Claim.

The circumstance leading to the filing of the Writ of Summons and Statement of Claim is based on the allegation that a debt of RM10.681 million is pursuant to payments made by the Plaintiff to MASTEEL between the years 2002-2004.

5. The expected losses, if any, arising from the Writ of Summons and Statement of Claim

As at the date of announcement, there is no expected losses arising from the Writ of Summons and Statement of Claim on the Group.

This announcement is dated 5 September 2019.

The Company wishes to announce that it has been served with a Writ of Summons dated 17 July 2019 and Statement of Claim dated 12 June 2019 by Safety Capital Sdn Bhd (“Safety Capital”).

Safety Capital is seeking for, inter alia, the payment of RM10,681,000.00 (“Sum”) by the Company, together with interest and costs (“Claim”), and is in relation to advances made by Safety Capital to the Company between the years 2002 to 2004. The Board of Directors has been advised by its solicitors that the Company has a strong case to dismiss the Claim.

As the Sum claimed is non-trading in nature and Management is of the view that it will not have any impact on the operations of the Group.

At the date of announcement, there is no material financial impact of the Writ of Summons on the Group.

The suit is scheduled for case management on 11 September 2019 before the Registrar at the Shah Alam High Court, and the Company will make further announcements as and when material developments arise.

This announcement is dated 30 August 2019.

By Surin Murugiah

KUALA LUMPUR (Aug 30): Malaysia Steel Works (KL) Bhd (Masteel) slumped to a net loss of RM10.39 million for the second quarter ended June 30, 2019 from net profit of RM7.98 million a year earlier, due to lower sales volume and selling price resulting in a lower margin.

In a filing today, Masteel said revenue for the quarter fell to RM294.68 million from RM324.69 million previously. Loss per share was 2.44 sen compared to earnings per share of 1.89 sen in the year-ago quarter.

For the six months ended June 30, Masteel posted net loss of RM19.07 million versus net profit of RM25.7 million in the year-ago period. Revenue dropped to RM574.9 million from RM759.5 million a year earlier.

On its prospects, Masteel said the company’s initiatives, which commenced in 2017, were in anticipation of the increasing volatility in the domestic steel business environment.

“Presently, the company is beginning to realise its technology driven cost cutting measures and expects to see the improvement of its performance in the coming quarters,” it said.

At the midday break today, Masteel shares were unchanged at 42.5 sen, valuing it at RM181.58 million.

By Chester Tay

KUALA LUMPUR: Malaysia Steel Works (KL) Bhd’s (Masteel) stand-alone credit profile remains vulnerable to fluctuations in steel price, the cost of raw materials and increased competitive pressures in the Malaysian market, according to Malaysian Rating Corp Bhd (MARC).

In a statement yesterday, MARC said given Masteel’s relatively modest market position in the production of steel billets and bars, mainly for local consumption, these factors have weighed on its profitability margins.

Nonetheless, the rating agency affirmed its AAA IS(fg) rating on Masteel’s RM130 million Sukuk Ijarah programme, with a stable outlook, based on the unconditional and irrevocable financial guarantee insurance provided by Danajamin Nasional Bhd.

“Noteholders are insulated from downside risks in relation to Masteel’s credit profile by the guarantee provided by Danajamin. Any changes in the supported rating or rating outlook will be primarily driven by changes in Danajamin’s credit strength,” it said.

According to MARC, the domestic construction and property sectors’ challenging conditions have exerted pressure on steel suppliers. The situation is exacerbated by a major player entering the steel sector in October 2018, leading to a price war.

Consequently, domestic steel bar prices declined to RM2,225 per tonne by end-December 2018 (versus RM2,750 per tonne in January 2018), it said.

While Masteel increased its output and improved its product mix to include a higher proportion of steel bars, generating higher margins compared with that of steel billets, the company still recorded a weaker operating margin of 1.4% in 2018, mainly due to a decline in gross steel bar margins, coupled with impairments in inventory and higher administrative expenses.

Also, for the first quarter ended March 31, 2019 (1QFY19), Masteel still faced weakening profitability, recording operating losses of RM11.4 million.

MARC, therefore, viewed that it would be challenging for Masteel to turn around its performance over the near term.

Masteel’s liquidity position also remains weak, it noted, with RM35.7 million in cash and cash equivalents, against a short-term debt of RM297.6 million, comprising mostly bills payable as at 1QFY19.

Masteel’s working capital requirement has risen as well, alongside an increase in sales volume and a higher cost of raw materials.

Nonetheless, MARC said Masteel has improved its receivable days to below 40 over the last three years. “Masteel’s investments in the more efficient induction furnaces have also somewhat prevented the group from incurring larger operating losses.”

On Masteel’s gearing level, MARC said it remained moderate at end-2018, as reflected by its debt-to-equity ratio of 0.59 times.

By Chester Tay

KUALA LUMPUR (Aug 6): Malaysia Steel Works (KL) Bhd’s (Masteel) standalone credit profile remains vulnerable to fluctuations in steel price, fluctuating cost of raw materials and increased competitive pressures in the Malaysian market, according to Malaysian Rating Corp Bhd (MARC).

In a statement today, MARC said given Masteel relatively modest market position in the production of steel billets and steel bars, which are mainly for local consumption, these factors have weighed on its profitability margins.

Nonetheless, the rating agency has affirmed its AAA IS(fg) rating on Masteel’s RM130 million Sukuk Ijarah programme with a stable outlook.

MARC said the affirmed rating and outlook are based on the unconditional and irrevocable financial guarantee insurance provided by Danajamin Nasional Bhd.

“Noteholders are insulated from downside risks in relation to Masteel’s credit profile by the guarantee provided by Danajamin. Any changes in the supported rating or rating outlook will be primarily driven by changes in Danajamin’s credit strength,” it said.

MARC noted that the challenging conditions in the domestic construction and property sectors have exerted pressure on steel suppliers.

“This was further exacerbated by the entrance of a major player in the steel sector in October 2018 which led to a price war resulting in domestic steel bar prices declining to RM2,225 per metric tonne (MT) by end-December 2018 (versus RM2,750 per MT in January 2018),” it said.

“Against this background, Masteel has increased its output and improved its product-mix to include a higher proportion of steel bars which generate higher margins compared to steel billets. For 2018, steel bar sales accounted for 87% of Masteel’s total revenue of RM1.5 billion,” it added.

During 2018, MARC said Masteel recorded a weaker operating margin of 1.4%, mainly attributable to a decline in gross steel bar margins, coupled with impairments in inventory and higher administrative expenses.

MARC pointed out that for the first quarter ended Mar 31, 2019 (1QFY19), Masteel continued to face weakening profitability, recording operating losses of RM11.4 million.

“MARC views that it would be challenging for Masteel to turnaround its performance over the near term,” it said.

The firm commented that Masteel’s liquidity position remains weak with RM35.7 million in cash and cash equivalents, against a short-term debt of RM297.6 million comprising mostly bills payable as at 1QFY19.

Masteel’s working capital requirement, said MARC, has risen alongside an increase in sales volume and higher cost of raw materials.

“Inventory days have increased to over 150 days, partly due to holding a higher amount of scrap steel to offset rising input costs through larger purchases,” it said.

Nonetheless, MARC said Masteel has improved its receivable days to below 40 days over the last three years.

“Masteel’s investments in the more efficient induction furnaces have also somewhat prevented the group from incurring larger operating losses,” it noted.

On Masteel’s gearing level, MARC said it remains moderate at end-2018, as reflected by its debt-to-equity (DE) ratio of 0.59 times.

“However, MARC expects Masteel’s DE to rise between 0.70 times and 0.80 times over the next two years. This is based on expectations that additional borrowings will be taken for the purchase of a second induction furnace and to bridge the funding gap due to margin compression,” it said.

At 3.24pm, Masteel was trading unchanged at 44.5 sen, giving it a market capitalisation of RM190.12 million.

The Board of Directors of Masteel wishes to announce that the Company proposes to obtain shareholders’ approval for the proposed renewal of authority for the Company to purchase its own ordinary shares (“Proposed Renewal of Share Buy Back”) at the forthcoming Forty-Seventh (“47th”) Annual General Meeting (“AGM”) of the Company.

At the AGM of the Company held on 21 June 2018, the shareholders of Masteel had granted a mandate for the Company to purchase up to 10% of its own ordinary shares. The authority shall expire at the conclusion of the forthcoming 47th AGM of the Company.

A Statement to Shareholders containing details in relation to the Proposed Renewal of Share Buy Back will be distributed to shareholders together with the Annual Report of the Company for the financial year ended 31 December 2018.

This announcement is dated 1 April 2019.

By Tan Xue Ying

KUALA LUMPUR (Feb 28): Malaysia Steel Works (KL) Bhd (Masteel) posted a loss of RM24.87 million in the fourth quarter ended Dec 31, 2018 or a loss per share of 5.84 sen because of lower margins, impairment of inventories and higher administrative expenses.

In the year-ago quarter, it made a net profit of RM12.12 million or earnings per share of 4.02 sen.

Revenue contracted 17.4% to RM348.93 million from RM422.33 million in the same quarter a year ago, due to lower sales volume and selling price.

For the full year, Masteel’s net profit slipped to RM6.75 million, a significant decline compared with RM75.46 million recorded in FY17 despite higher revenue of RM1.5 billion, from RM1.46 billion in the previous year.

Masteel said its cost of production should be better in the Jan-March quarter as it expects to see convergence of its material costs between iron ore and scrap for steel-making.

However, the seasonal slowdown because of the Lunar New Year festivities, and a general slowdown in the construction and property sectors could further dampen demand for Masteel’s product and prices.

To counter this, Masteel said it is implementing extensive initiatives to streamline its manufacturing  processes and supply chain to improve margins.

Masteel fell three sen or 5.56% to 43 sen today, valuing the company at RM180.87 million.

MASTEEL’s Sukuk Ijarah is being guaranteed by Danajamin and consequently, Malaysian Rating Corporation Berhad (“MARC”) has on the 21st of November 2018 assigned a final financial guarantee supported rating of AAA IS(fg) with a stable outlook to the Company’s proposed Sukuk Ijarah Programme. The Company is indeed pleased to announce that its Sukuk Ijarah Issuance has been oversubscribed by approximately 30%.

The funds available from this issuance shall be used for the repayment of existing term loans, funding of general working capital requirements, and for the acquisition of a melting technological package which will significantly improve the conversion costs of the Company’s steel billets and fortify its competitiveness in the foreseeable future.

The injection of additional working capital funds into the Company will not only improve its liquidity position, but also allow it to scale up its operations in line with the installation of the new technological package.

Furthermore, in an environment of rising interest rates, the Company is diversifying a portion of its loans from floating-rates to a fixed-rate for a significant portion of its long-term debts in order to minimize the Company’s interest rate risks. The Company foresees this mix of financing will allow the Company to have a more efficient cost of capital.

Due to the robust shareholders’ funds of the Company, the issuance of the Sukuk Ijarah of RM130 Million in nominal value only increased the Company’s Gearing Ratio marginally from 0.46 times (as at 30 September 2018) to 0.61 times.

This announcement is dated 30 November 2018.

By Amir Ridzwan Ismail

KUALA LUMPUR (Nov 30): Danajamin Nasional Bhd is guaranteeing a five-year RM130 million Sukuk Ijarah Programme issued by Malaysia Steel Works (KL) Bhd (Masteel).

The sukuk is rated AAAIS(fg) by Malaysian Rating Corp Bhd (MARC), following the backing of an irrevocable and unconditional Kafalah Guarantee provided by Danajamin.

“Masteel has almost 50 years of track record. They have endured several crises throughout their establishment and have since grown from strength to strength as one of the key players in the industry. Through our guarantee, we hope to instill investors’ confidence and assist Masteel to successfully deliver their business objective and continue to contribute meaningfully to the nation’s economy,” said Danajamin chief executive officer Mohamed Nazri Omar in a statement today.

Masteel managing director and chief executive officer Datuk Seri Tai Hean Leng said the funds available from this issuance will be used primarily for refinancing, working capital and for the acquisition of a new melting technology package.

“This technology will be a game changer for Masteel, putting us well ahead of the competition. The issuance will not only improve our liquidity position, but will enable Masteel to expand our operation, in line with the installation of the new facilities,” he added.

The principal adviser/lead arranger, lead manager, Shariah adviser and facility agent for this transaction is Kuwait Finance House (Malaysia) Bhd.

To date, Danajamin has guaranteed 37 issuers, with a total guarantee size of RM10.6 billion.

（吉隆坡29日讯）赚幅降低和外汇亏损升高，马来西亚钢厂（MASTEEL,5098,主板工业产品服务组）截至9月30日第三季净利下跌84.82%，至587万2000令吉，拖累首9月净利减少50.15%，至3157万5000令吉。

第三季营业额减少3.24%，至3亿8843万2000令吉；首9月营业额扬升10.28%，至11亿4792万8000令吉。

该公司在文告中表示，第三季营收微跌，因销售量减少和国内需求走软，盈利下滑则主要由于赚幅降低和外汇亏损升高。

展望未来，大马钢条市场面对新的进场者，本地钢条价格继续滑落，正冲击该公司产品的赚幅。尽管面对挑战，该公司正建造新的和更节省成本的生产设备以跟上大势，在新设备和设施于2019年启用后，预期赚幅可改善。

3Q18 Financial Results

By Tan Xue Ying

KUALA LUMPUR (Nov 29): Malaysia Steel Works (KL) Bhd (Masteel) recorded a 85% drop in net profit to RM5.87 million for the third quarter ended Sept 30 from RM38.67 million a year ago, on lower margins and higher foreign exchange losses.

Earnings per share plunged to 1.38 sen, from 12.88 sen in the year-ago quarter.

Revenue contracted 3.2% to RM388.43 million from RM401.45 million a year ago, owing to lower sales volume on a softer domestic demand.

In an exchange filing today, the steel bars and billets maker attributed the weakened earnings to lower margins and higher foreign exchange loss.

Its financial statements showed operating expenses were 30% higher during the quarter against a year ago, and it also booked RM4 million of ‘other expenses’.

For the cumulative nine months, Masteel’s net profit halved to RM31.58 million, from RM63.34 million before, notwithstanding a 10.3% year-on-year growth in revenue to RM1.15 billion from RM1.04 billion.

Masteel cautioned that declining local steel bar prices and competition from new entrants of bars and billets supply would affect its margins.

However, the group expects margins to improve with its new equipment and facilities coming on stream next year.

Masteel slid two sen to close at 42 sen for a market capitalisation of RM178.86 million. The stock is currently trading at its lowest since Dec 9, 2016.