Kuala lumpur: Press Metal Aluminium Holdings Bhd is set to enhance its stake in PMB Technology Bhd, moving to acquire an additional 35.6 per cent, which will elevate its total interest to a commanding 58.8 per cent from the current 23.2 per cent. This strategic acquisition, valued at RM464.95 million in cash, signifies Press Metal's intent to gain statutory control over PMB Technology, potentially steering the loss-making entity towards more lucrative silicon-aluminium alloy manufacturing.
According to BERNAMA News Agency, Press Metal has formalized a conditional share sale agreement with PMB Technology's founders, the Koon brothers, namely Tan Sri Datuk Koon Poh Keong, Datuk Koon Poh Ming, Datuk Koon Poh Tat, Koon Poh Weng, and Datuk Koon Poh Kong. The agreement encompasses the purchase of 664.22 million PMB Technology shares at 70 sen each. The acquisition is to be financed via Press Metal's internally generated funds, as disclosed in a filing with Bursa Malaysia.
The acquisition comes at a time when PMB Technology, previously a 23.2 per cent-owned associate of Press Metal, faces challenges due to declining silicon metal prices. The business has encountered losses amidst structural oversupply and diminished downstream demand. Despite the acquisition typically necessitating a mandatory takeover offer, the Securities Commission Malaysia has exempted Press Metal from this requirement, given that the Koon family will continue to hold ultimate control over both companies.
With the proposed acquisition slated for completion in the third quarter of 2026, Press Metal aims to capitalize on PMB Technology's hydropower resources and facilities within the Sarawak Corridor of Renewable Energy. The plan is to shift part of PMB Technology's operations from silicon metal production to silicon-aluminium alloy smelting, pending necessary approvals.
Press Metal envisages that this strategic move will diversify PMB Technology's earnings by diminishing its dependence on the volatile silicon metal market, while harnessing the promising prospects of silicon-aluminium alloys. PMB Technology has suffered a financial decline, with silicon metal prices plummeting to US$1.27 per pound in July 2026 from US$3.47 per pound in 2022. Consequently, the company reported a net loss of RM12.8 million for the financial year ending 2025, in stark contrast to a net profit of RM110.4 million in FY2022.
The outlook for silicon metal remains daunting due to persistent oversupply and reduced downstream demand, with a near-term price recovery appearing improbable. Profit margins are likely to remain compressed, exacerbated by the US dollar's continued weakness, as most silicon metal transactions are dollar-denominated.
Conversely, the global demand for silicon-aluminium alloy remains robust, buoyed by low inventory levels and its usage in clean energy applications. "Furthermore, tightening global supply amid intensifying geopolitical tensions is expected to underpin a supportive aluminium price outlook," Press Metal noted.