Source: The Edge
YKGI Holdings Bhd is purchasing 1.43 million new shares from its debtor Acesteel Industries Sdn Bhd, at an issue price of RM2.45 apiece, to settle a debt totalling RM3.5 million.
The shares represent 51.41% of the enlarged share capital of Acesteel, YKGI said in a filing with Bursa Malaysia.
YKGI said the debt settlement deal with Acesteel was entered into by its wholly-owned subsidiary, Star Shine Marketing Sdn Bhd (SSM).
“Upon completion of the proposed debt settlement, Acesteel will become a subsidiary of SSM and SSM will assume board control of Acesteel whilst the operation will remain with the existing management of Acesteel,” said YKGI.
The settlement, it said, is in line with its business plan to develop and expand its downstream steel business in Peninsular Malaysia following the completion of the disposal of its coated coil business in the second quarter of this year.
“With the acquisition of Acesteel, it will provide a platform for YKGI Group to escalate its plan to further expand its downstream business in West Malaysia reinforcing the group’s current business of which its major subsidiary, Asteel Resources Sdn Bhd, is currently the market leader in the metal roofing segment in East Malaysia,” it added.
The board of the company expects the settlement to be completed by the third quarter of 2019.
Acesteel is a customer of SSM whereby it supplies coated steel coil to Acesteel for the production of roofing products.
Shares of YKGI closed unchanged at 10.5 sen, giving it a market capitalisation of RM36.82 million. The counter saw some 286,900 shares exchanging hands.