This article first appeared in The Edge Financial Daily on June 11, 2019

KUALA LUMPUR: The public portion of ACE Market-bound steel pole maker Mestron Holdings Bhd’s initial public offering (IPO) has been oversubscribed 17.53 times.

In a statement yesterday, Mestron said 5,720 applications for 731.97 million new shares, valued at RM117.12 million, have been received from the Malaysian public for 39.5 million new shares made available for public subscription.

It said 8.75 million new shares available for application by eligible directors and employees have also been fully subscribed.

In addition, the placement agent confirmed that 188.75 million shares available for application via a private placement to selected and bumiputera investors approved by the ministry of international trade and industry have been fully placed out.

Mestron managing director Por Teong Eng said the company is encouraged by the response. “I am confident that Mestron will grow stronger, better and more competitive and we will strive to ensure we do not disappoint our shareholders and investors who place their trust in us,” he said.

Mestron has supplied steel poles to high-profile construction projects such as the East Klang Valley Expressway, the Coastal Highway Southern Link, the Ampang Light Rail Transit line extension, the Sungai Buloh-Kajang Mass Rapid Transit and the Bukit Jalil Sports Complex refurbishment.

Under the listing, Mestron said it has raised RM25.28 million from its public issue of 158 million new shares at 16 sen per share. As part of its listing, the company’s existing shareholders also made an offer for sale of 79 million shares via a private placement to selected investors.

Of the total IPO proceeds, RM13 million or 51.4% will be used to expand its main manufacturing facility and acquire more manufacturing machinery and equipment for future business growth; RM5.18 million (20.5%) for working capital to purchase raw materials such as steel plates and pipes to support its capacity expansion; RM4 million (15.8%) to repay bank borrowings; and the remaining RM3.1 million (12.3%) to defray listing expenses.

The firm said all notices of allotment for these shares will be mailed to successful applicants on or before June 17, 2019. Mestron’s listing is tentatively scheduled for June 18. M&A Securities Sdn Bhd is the adviser, sponsor, underwriter and placement agent for the IPO.