Tuesday, 16 February 2010

TKC Steel raising $1b to finance expansion

Jenniffer B. Austria
Manila Standard

TKC Steel Corp., the only publicly- listed steel company in the Philippines, plans to raise as much as $1 billion to establish the largest integrated steel manufacturing facility in the country.

TKC Steel said in a disclosure to the stock exchange it appointed Pricewaterhouse Coopers Financial Advisors Inc. as financial adviser to help raise the funds.

Pricewaterhouse will identify prospective strategic partners and investors and prepare a work program, including the acquisition of mining interests related to iron ore.

TKC Steel will use the raw material feedstock for the blast furnace project of subsidiary Treasure Steelworks Corp., which is nearing completion in Iligan City.

“The program is envisioned to provide the investment environment for further steel expansion of the steel manufacturing and the mining industry sectors,” TKC Steel said.

TKC Steel chairman Ben Tiu said in a text message that family-owned mining areas could be transferred to TKC Steel. The Tiu family has one mining claim each in Mindanao and Visayas.

The transfer of the company’s mining claims to TKC Steel is expected to ensure the steady supply of iron ore for its blast furnace.

TKC Steel earlier tied up with Zamboanga-based Mikro-Tech Inc. and Karanglan Resources and Mining Corp. to conduct exploration of more than 8,700 hectares of mining prospects in Zamboanga del Sur.

It is also in talks with Vinc Vita Mining Corp. for the supply of up to three million of iron ore over the next five years.

Tiu said the blast furnace would be operational within the next few weeks. The facility is expected to double the company’s billet annual production to 600,000 metric tons from the current level of 300,000 MT.

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