TKC Steel plans P2.4-B follow-on share offer

TKC Steel Corp. (formerly SQL Wizard Inc.) is planning to raise as much as P2.4 billion from a follow-on offering of shares.

In a disclosure to the Philippine Stock Exchange, TKC said it has appointed First Metro Investment Corp. as financial advisor for the offering.

TKC is controlled by the Tiu family, who used to own International Exchange Bank (iBank) until it was bought by Union Bank of the Philippines.

The family, which has been in the steel business for 40 years, is also into construction, with interests in Goodyear Steel Pipe Corp. and the Discovery Suites Group.

TKC Steel recently acquired 96 percent of Treasure Steelworks Corp. for P96 million.

Billions Steel International Ltd., a Mauritius-registered corporation, and Makati-based SYL Holdings Inc., transferred their rights and interests in Treasure.

TKC Steel is expected to produce 188,000 metric tons of steel billets by the end of the year while Treasure’s output is expected to reach 264,000 metric tons with sales growing to P6.6 billion.

Treasure operates its billet-making plant in a 20-hectare area in Maria Cristina, Nonucan in Iligan City.

The plant is covered by a 25-year operating lease starting 2005.

Raw materials used for billet production are scrap sourced from neighboring provinces in Visayas and Mindanao via major scrap consolidators or its own collection network. About 75 percent of Treasure’s total revenues is allocated for raw materials.

TKC Steel earlier entered into an agreement with parent firm Star Equities Inc. for a 90 percent interest in Zhanghou Stronghold Steel Works Ltd. of Zhang Zhou, Fujian province for P594.06 million which was Star’s cost of investment.

The firm has a pending application with the Philippine Stock Exchange to upgrade its listing to the second board from the SME board. It has also applied for the additional listing of 680 million shares which were subscribed by Star Equities.