Founded in 1971, Malaysia Steel Works (KL) Bhd (“Masteel”) is a pioneer in the use of innovative technology to produce construction steel to reduce Malaysia’s reliance on imported steel for the construction and infrastructure sector.
With a steel production capacity of 750,000 million tonnes per year, its principal activities are manufacturing and marketing steel bars and prime steel billets for the domestic and export market. Despite generating hundreds of millions of profits in good years, the capital intensive, cyclical nature of the industry occasionally results in mismatch between its banks’ repayment program and the Company’s cashflow.
Our experience with Danajamin has been extremely pleasant, professional, and interactive.
By having access to Danajamin’s guaranteed Sukuk bonds, it has improved our abilities to match our cashflow against our debt repayments and to diversify a portion of our long-term debts from floating-rates to fixed-rates in order to minimise the Company’s interest rate risks. Throughout our maiden foray, Danajamin provided tremendous guidance and helped in the book-building process while introducing Masteel to many blue chip investors.
Danajamin has also guided and advised us on how to structure the Sukuk and Kafalah Guarantee as well as organise and provide the bulk of the guarantee for the issuance of Sukuk instruments. The proceeds raised by the Sukuk paper were primarily used to fund the capital expenditure of our new steel melting technology and retire our term loans. The new steel melting technology has successfully reduced our cost of production, which allowed us to remain competitive in the industry.
Our journey with Danajamin has been overwhelmingly positive, professional, and interactive. With the advantages of the new steel-making technology, our company will continue to leverage on this success to grow our market share and profitability in the years ahead.