TKC Steel Corp to raise P2.7-B add’l capital

TKC Steel Corp., the only steel manufacturing firm listed at the Philippine Stock Exchange, has secured the Securities and Exchange Commission’s approval to proceed with a proposed follow-on offering of shares estimated to raise up  to P2.7 billion in additional capital.

The company will offer a total of 235 million common shares at a price ranging from P8 to P 11.50 each share. This would increase the number of common shares by 25 percent or a total of 940 million shares.

TKC, the country’s largest steel firm,  expects to raise between P1.88 billion and P2.7 billion from the additional share issue which it plans to use for the expansion of operations of its two subsidiaries.

First Metro Investment Corp. has been tapped as financial adviser, issue manager and lead underwriter for the offering.

Proceeds from the additional share issue will be used for the repayment of a short-term bank loan which will mature in January 2008 (P200 million), the expansion of Treasure Steel Corp. (P450 million to P500 million) and its China-based unit Zhang Zhou Stronghold Steel Works Co. Ltd.  (P700 million to P1.4 billion).

Treasure Steel operates a billet-making plant in Iligan City, Lanao del Norte. The plant, formerly owned by National Steel Corp., is the largest in the Philippines with an installed capacity of 300,000 metric tons.

Zhang Zhou, on the other hand,  manufactures spiral pipes and electric resistance welded pipes for general construction, water transmission, and oil and gas applications with a production capacity of  200,000 metric tons of finished pipe products per year.

TKC Steel is part of the Tiu Group of Companies that owns a wide range of businesses from financial servicing to hospitality and tourism. Among these companies include newly-listed iRemit, an overseas remittance services company, Sterling Bank of Asia and the Discovery Hotel chain.