TKC Steel completes backdoor listing

REPORT FROM BUSINESSWORLD Listed TKC Steel Corp., formerly SQL Wizard, Inc., secured the approval of the Securities and Exchange Commission to change its primary purpose into a holding company. Under the amended articles of incorporation, TKC Steel can engage in the business of smelting, fusing, shaping, rolling, casting, fabricating, extruding, developing or processing of metals, steel or other alloys of metallic, nonmetallic or other compounds. SQL Wizard was incorporated by a group led by two former executives of Oracle Philippines Alberto Hermoso and Heraldina Salonga to serve a niche market "not adequately covered" by the local Oracle subsidiary. Its activities then consisted of providing consulting services to Oracle customers for project management, design and development of applications, database administration, and application and database tuning; developing packaged application systems; selling the company’s own application products namely Phoenix and E*Wizard and reselling Oracle software. "With the change in primary purpose of the company to a holding company, it (TKC) intends to acquire 90% of equity in ZZ Stronghold through Billions Steel International Ltd. and entire equity in Treasure Steelworks Corp. (in Iligan)," TKC said earlier in a filing. Last April 30, TKC Steel entered into an agreement with Star Equities, Inc. for the acquisition of the latter’s 90% interest in Zhanghou Stronghold Steel Works Ltd. of Zhang Zhou, Fujian province for P594.06 million. Star Equities is an investment and holding company owned by the Tiu family. The Tiu family has significant interests in construction-related businesses such as Goodyear Steel Pipe Corp., property development and tourism under the Discovery Suites Group flagship and financial services, such as i-Remit and Sterling Bank of Asia. TKC Steel has filed an 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 majority shareholder, Star Equities. Trading of TKC shares has been suspended since March. The P680-million equity infusion from Star Equities will be used by TKC Steel to acquire control of two steel businesses: Zhangzhou and Treasure Steelworks. Zhangzhou is the first seamless pipe manufacturer in Fujian province in mainland China. These products are used in the oil and gas industry. It will be serving not only the domestic China market but also nearby export markets like Indonesia, Philippines and other Southeast Asian countries. Treasure Steelworks operates the largest steel billet plant in the Philippines with an annual rated capacity of 300,000 metric tons. Its products are used by rebar manufacturers to produce steel bars for the construction industry. Planning to raise additional capital in a follow-on offering within the fourth quarter, TKC Steel has tapped First Metro Investment Corp. as financial adviser and issue manager. Offering proceeds will be used to expand the China business. — Ruby Anne M. Rubio/BusinessWorld