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Borneo, Sarawak, Sarawak Corridor of Renewable Energy (SCORE), Sarawak Economy

Japanese company Hanwa invests in OMH’s Samalaju plant

OM HOLDINGS (OMH) has raised nearly RM97 million (A$30 million) for its plant at Samalaju Industrial Park.

This is to accelerate the development of the plant, which comes under the Sarawak Corridor of Renewable Energy (SCORE).

The company revealed that around RM32 million (A$9.77 million) was raised through a share subscription agreement with Japanese trading company Hanwa Co. Ltd., which also executed an RM64.4 million (A$20 million) convertible note subscription agreement.

Under this agreement, OMH would place 25 million ordinary shares to Hanwa at an issue price of RM1.26 (A$0.39) a share, representing a 10 per cent premium to the 15-day volume weighted average price of OMH’s shares.

In return, Hanwa agreed to provide around RM64.4 million (A$20 million) in financing to fund OMH’s 80 per cent interest in the Samalaju smelting project.

OMH would issue Hanwa 25 million unsecured convertible notes at a face value of RM2.58 (A$0.80) a note, to raise around RM69.08 million (A$21.45 million).

OMH’s trading subsidiary OM Materials has also reached a marketing agreement with Hanwa covering 80,000 tonnes of ferro silicon and 80,000 tonnes of silico manganese product from the Samalaju smelter.

“We have worked hard with the Hanwa team to establish a highly cooperative and long-term strategic partnership in order to create a platform for significant value creation through executing mutually beneficial synergies between our companies,” OMH executive chairman Low Ngee Tong is quoted as saying.

“We have tailored this investment, funding facility and marketing agreement to allow OMH to further advance our corporate and offtake objectives for the Sarawak smelting project while having minimal dilution on the company’s existing shareholders and providing control over the company’s capital structures,” he added.

Low pointed out that the transaction was a “tremendous opportunity” to advance OMH and add real value for all shareholders through the timely development of the Samalaju smelter.

In November last year, OMH approved an RM1.613 billion (A$501 million) investment at the Samalaju smelter to support the production of some 600,000 tonnes per year of ferroalloy.

The production would consist of 310,000 tonnes per year of ferro silicon alloys and a further 290,000 tonnes per year of manganese ferroalloys.

Commercial production for the Samalaju project would be executed on a phased ramp-up basis, with construction expected to start in the third quarter of next year.

Production from the smelting project is expected to start no later than the first quarter of 2014, with full commercial production scheduled to be reached by the second quarter of 2015.

Hanwa, which was established in 1947, supplies a broad spectrum of products, including steel, non-ferrous metals, food, fuel, chemicals, lumber, machinery and many other items, to an equally diverse range of customers.

It has offices throughout Japan, North and South America, Asia, Europe, the Middle East and Africa.

Hanwa is a truly global company based in Japan and it obviously believes in OMH’s Samalaju project and therefore in SCORE.

This is Hanwa’s third investment in ferro silicon, manganese alloys, manganese ores and metal materials resource after the investment in Samancor in South Africa and in Ruukki in Finland for security of ferro chrome supplies.

On its website, the company said: “We think that our partnership and joint work with OMH will greatly help our business in ferro silicon and ferro manganese field for the long-term and we will put an effort to match our major clients’ current demand, such as Japanese blast furnace mills and electric furnace mills who have intentions to buy ferro alloys from countries other than China.”

Meanwhile, let’s not forget that OMH already has a binding term sheet in place for its Samalaju plant with JFE Shoji Trade Corporation of Japan.

The signed term sheet is for an off-take of up to 100,000 tonnes per annum of ferro silicon product.

Great stuff. Real transformation for a secure future for Sarawakians and not just passing change.

Part of the report from The Australian:

Japanese take stake in Sarawak smelting project

OM Holdings has secured funding for its Sarawak smelting project in Malaysia from Japanese trading company Hanwa, which will take a 4.1 per cent stake in the Australian manganese producer and help it sell to steelmaking ferro alloy customers in Japan and elsewhere.

OMH said it would sell 25 million shares to Hanwa at 39.7c each, raising more than $9.8 million. Hanwa will provide about $20m in financing, with OMH issuing to it 25 million unsecured convertible notes at a face value of 80c each.

The report from Mining Weekly.Com

OMH secures funding for Sarawak project

By: Esmarie Swanepoel

PERTH (miningweekly.com) – ASX-listed OM Holdings (OMH) has raised nearly A$30-million to accelerate the development of its Sarawak smelting project, in Malaysia.

The manganese miner said on Wednesday that around A$9.77-million had been raised by a share subscription agreement with Japanese trading company Hanwa, which also executed a A$20-million convertible note subscription agreement.

OMH would place 25-million ordinary shares to Hanwa, at an issue price of A$0.39 a share, representing a 10% premium to the 15-day volume weighted average price of OMH’s shares.

Hanwa has also agreed to provide around A$20-million in financing to fund OMH’s 80% interest in the Sarawak smelting project. OMH would issue Hanwa 25-million unsecured convertible notes at a face value of 80c a note, to raise around $21.45-million.

Meanwhile, OMH’s trading subsidiary OM Materials has also reached a marketing agreement with Hanwa covering 80 000 t of ferrosilicon and 80 000 t of silico manganese product from the Sarawak smelter.

“We have worked hard with the Hanwa team to establish a highly cooperative and long-term strategic partnership in order to create a platform for significant value creation through executing mutually beneficial synergies between our companies,” said OMH executive chairperson Low Ngee Tong.

“We have tailored this investment, funding facility and marketing agreement to allow OMH to further advance our corporate and offtake objectives for the Sarawak smelting project while having minimal dilution on the company’s existing shareholders and providing control over the company’s capital structures,” he added.

Low noted that the transaction was seen as a “tremendous opportunity” to advance OMH and add real value for all shareholders through the timely development of the Sarawak smelter.

In November last year, OMH approved a $501-million investment at the Sarawak smelter to support the production of some 600 000 t/y of ferroalloy. The production would consist of 310 000 t/y of ferrosilicon alloys and a further 290 000 t/y of manganese ferroalloys.

Commercial production at the Sarawak project would be executed on a phased ramp-up basis, with construction expected to start in the third quarter of 2013. Production from the smelting project is expected to start no later than the first quarter of 2014, with full commercial production scheduled to be reached by the second quarter of 2015.

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  1. Pingback: Earthworks nearly completed for OMH’s Samalaju plant « Parochial Sarawakian - April 30, 2012

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