KUALA LUMPUR (Oct 11): Ta Win Holdings Bhd is partnering a Chinese copper manufacturer and a HongKong-based metal trading company to jointly operate a new copper rod manufacturing line in Malaysia.

Ta Win said the joint venture with China-based Full Dragon Electric (Guang Dong) Co Ltd and Hong Kong firm Wing Ying Non-Ferrous Trading Ltd is “in line with the company’s business plan to expand into higher-margin business lines”.

In a filing with Bursa Malaysia, the group said the partners aim to expand in all three markets in Malaysia, mainland China and Hong Kong, and to “enhance fund-raising prospects from overseas capital markets” for future expansions.

All parties “agree to leverage and provide all necessary expertise, finances and resources required for operation and expansion of the joint venture,” it added.

Ta Win said recently-incorporated Ta Win Copper Sdn Bhd will act as the special purpose vehicle (SPV) for the joint venture.

Ta Win will own a 65% stake in the SPV whereas Full Dragon and Wing Ying will own 10% and 25% respectively.

The initial arrangement of capital contribution will see Ta Win contributing up to US$1.86 million via internal funds, followed by US$1 million each from Full Dragon and Wing Ying.

From the total US$3.86 million, some US$1.75 million will be capitalised as paid-up equity in the SPV, while the balance will be treated as long-term debt, said Ta Win.

Any additional funding will be arranged and injected by Ta Win in the form of debt at local market financing rate not exceeding 7%, or any other rate agreed by the joint venture partners.

Ta Win said the partnership will enable the group to leverage on the other two partners’ operational and technical know-how in the new copper production line and fuel the group’s growth organically by expanding production capacity, sales volume as well as margins.

It added that Ta Win would also benefit from the partners’  establishment in the overseas market, which is expected to complement the group’s existing copper production line and enable a smooth penetration into the overseas market.

Shares of Ta Win closed unchanged at 56 sen, giving the group a market capitalisation of RM40.17 million.