MARKET DEVELOPMENT
UGB to Use IPO Proceeds To Expand Indonesian Valve Business
UGB to Use IPO Proceeds To Expand Indonesian Valve Business
08/10/2013 (The Star) - Unimech Group Bhd (UGB) will use the targeted proceeds of RM13.7mil to RM23mil from the listing of its subsidiary, PT Arita Prima Indonesia TBK (API), to expand its valve business for the palm oil industry in Indonesia over the next two years.
API, scheduled for an end-October listing, will issue 275 million shares, which is 25.58% of its total 1.075 billion shares, at a price to be determined later.
UGB chief executive officer Datuk Lim Cheah Chooi said the proceeds would be used to set up 12 more Arita valve warehouses, increasing the total number of warehouses in Indonesia to 40 from the current 28.
“About RM6mil will be allocated for the expansion exercise,” Lim said after an EGM yesterday to get shareholder approval for the listing of API in Indonesia.
He said a portion of the proceeds would also be used to purchase inventory for new industries to be penetrated by API.
“These include the oil and gas and petrochemical industries,” he said.
API’s principal activities are in the designing and fabrication of valves, providing industrial piping system design services, installation of valves and fittings, and maintenance of boilers.
Meanwhile, according to the World Agricultural Supply and Demand Estimates report, the United States Department of Agriculture has unexpectedly cut its US soybean production estimate by 5% to 88.6 million tonnes or 3% below the consensus forecast of 91.36 million tonnes, mainly on lower harvested area and yield estimates.
According to a recent report in The Borneo Post, the global soybean production has also reduced by 1.5% to 281.72 million tonnes from a recent estimate of 285.89 million tonnes.
“By itself, the news of the lower-than-expected US soybean production should be positive to crude palm oil prices.
“Insufficient soybean would lead to low soybean oil supply globally and this would increase demand for palm oil, which is commonly used as a soybean oil substitute,” the report said.
API, scheduled for an end-October listing, will issue 275 million shares, which is 25.58% of its total 1.075 billion shares, at a price to be determined later.
UGB chief executive officer Datuk Lim Cheah Chooi said the proceeds would be used to set up 12 more Arita valve warehouses, increasing the total number of warehouses in Indonesia to 40 from the current 28.
“About RM6mil will be allocated for the expansion exercise,” Lim said after an EGM yesterday to get shareholder approval for the listing of API in Indonesia.
He said a portion of the proceeds would also be used to purchase inventory for new industries to be penetrated by API.
“These include the oil and gas and petrochemical industries,” he said.
API’s principal activities are in the designing and fabrication of valves, providing industrial piping system design services, installation of valves and fittings, and maintenance of boilers.
Meanwhile, according to the World Agricultural Supply and Demand Estimates report, the United States Department of Agriculture has unexpectedly cut its US soybean production estimate by 5% to 88.6 million tonnes or 3% below the consensus forecast of 91.36 million tonnes, mainly on lower harvested area and yield estimates.
According to a recent report in The Borneo Post, the global soybean production has also reduced by 1.5% to 281.72 million tonnes from a recent estimate of 285.89 million tonnes.
“By itself, the news of the lower-than-expected US soybean production should be positive to crude palm oil prices.
“Insufficient soybean would lead to low soybean oil supply globally and this would increase demand for palm oil, which is commonly used as a soybean oil substitute,” the report said.