OMH executive chairman Low Ngee Tong said the board of directors believe that the secondary listing of OMH ordinary shares on Bursa Malaysia would broaden the company’s shareholder base and improve trading liquidity.
KUCHING: Australia’s listed integrated manganese and silicon company OM Holdings Ltd (OMH) is seeking a secondary listing on Bursa Malaysia.
OMH has a controlling 75% stake in OM Materials (Sarawak) Sdn Bhd (OM Sarawak), with its joint-venture partner CAHYA MATA SARAWAK BHD (CMS) owning the remaining 25% equity interest.
OM Sarawak owns a ferrosilicon and manganese alloy smelting plant in Samalaju Industrial Park, Bintulu, and the company is a pioneer energy-intensive investor in Sarawak Corridor of Renewable Energy (SCORE).
OMH has appointed UOB Kay Hian Securities (M) Sdn Bhd (UOBKH) as the principal adviser for the proposed secondary listing.
“UOBKH will also act as the joint global coordinator for any potential share placement under the proposed secondary listing together with Affin Hwang Investment Bank Bhd.
“Assuming all the relevant terms and conditions associated with the proposed secondary listing process are achieve and the prevailing market conditions are appropriate, it is anticipated that the exercise could be completed by Q3 2020, ” OMH said in recent filing with Australian Securities Exchange (ASX).
OMH said it will continue to maintain its primary listing on ASX.
In conjunction with the proposed secondary listing process, OMH said it may consider issuing and placing new shares to raise additional capital for future expansion complementary to its vision of a strategic ferroalloy smelting hub in Malaysia.
According to OMH, some US$500mil has to-date been invested in OM Sarawak’s ferroalloy smelter.
“With a long-term competitively priced power contract, excellent logistics and infrastructure, the cost-competitive smelter supports steel makers globally.
“The company considers that the proposed secondary listing will further enhance the growth potential of the smelter and facilitate the company’s long-term growth strategy in the region, ” said OMH.
OMH executive chairman Low Ngee Tong said solid interest in the domestic market in its Samalaju smelter project and SCORE is evident from local coverage and investor visits.
He said the board of directors believe that the secondary listing of OMH ordinary shares on Bursa Malaysia would broaden the company’s shareholder base and improve trading liquidity.
“Relevant approvals are being sought and this will be the first listing of its kind involving shares possibly being traded on the ASX and Bursa Malaysia, and we look forward to updating shareholders in the coming months, ” Low said in the company’s 2019 annual report released last week.
OM Sarawak is embarking on an expansion project for its smelting plant to boost production capacity. It is currently working on the design and preparation for its Phase 2 project targeted for completion by 2020, according to CMS group managing director Datuk Issac Lugun.
Phase 2 project entails the construction of an additional two to four sets of manganese alloy furnaces.
Under Phase 1, there are 10 ferrosilicon furnaces and six manganese furnaces. The plant has a current production capacity of between 170,000 tonnes and 210,000 tonnes per annum of ferrosilicon and between 250,000 and 300,000 tonnes per annum of manganese alloy.
OM Sarawak’s latest investment of about A$20mil was in a sinter plant, which underwent cold commissioning in Q4 2019, with hot commissioning targeted in first half-2020.
The sinter plant, which has a production capacity of 250,000 tonnes per annum, is set to reduce the production cost of manganese alloy by upgrading manganese ore fines via a sintering process with coke to produce sintered manganese ore lump.
Besides bringing down the cost of producing manganese alloy, it will also improve furnace productivity.
In the first quarter ended March 31,2020, OM Sarawak recorded production output of 52,308 tonnes of ferrosilicon and 51,723 tonnes of manganese alloy, which comprised mainly siliconmanganese and high carbon ferromanganese. Fourteen out of 16 furnaces were in operation with eight furnaces producing ferrosilicon and six furnaces producing manganese alloy.
Due to the Covid-19 pandemic, two ferrosilicon furnances were shut down in early February.
OMH said due to the Malaysia government’s Movement Control Order (MCO) imposed in March which required non-essential businesses and services to ease, this has impacted manufacturers’ production capability as labour shortages were experienced due to strict travel restrictions.
The company sold 48,540 tonnes of ferrosilicon and 55,167 tonnes of manganese alloy during the quarter under review.
In Q1 2020, OM Sarawak made principal loan repayments of US$12.9mil to project finance lenders, OMH said when filing its latest quarterly results with ASX on Thursday (April 30).
(CMS) owning the remaining 25% equity interest.
(20min delay)