Posted on 30 Oct 2024
Green Esteel Pte Ltd, which also has a presence in Malaysia, is poised to emerge as the “new strategic investor and controlling shareholder” in Southern Steel Bhd.
In a proposed corporate move, Green Esteel will pay RM315.9 million to acquire 752.1 million new shares at a price of 42 sen per share, securing a 50.1% stake in the Malaysian entity.
In an exchange filing today, Southern Steel said Green Esteel and its controlling shareholder, You Zhenhua, are seeking Securities Commission’s approval for exemption from having to make a mandatory takeover offer for the remaining shares.
If approved, Southern Steel would become a subsidiary of Green Esteel and an associate company of Hong Leong Manufacturing Group Sdn Bhd.
In another proposal, Southern Steel plans to offer up to 152.7 million additional shares to investors, representing up to 10.18% of the enlarged issued share capital, at the same price of 42 sen per share. This private placement is expected to raise up to RM64 million.
The move was aimed to meet public shareholding requirements as Greeb Esteel becomes a major shareholder.
From the total RM380 million to be raised, Southern Steel plans to deploy RM250 million to upgrade plant and machinery within the next three years.
Incorporated in Singapore in 2017, Green Esteel and its subsidiaries are involved in steel related businesses.
It wholly owned subsidiaries in Malaysia including Antara Steel Mills Sdn Bhd, Eden Flame Sdn Bhd and Esteel Enterprise Sabah Sdn Bhd, whose principal activities include the manufacturing and sale of steel and related products, according to the exchange filing.
Esteel Enterprise Sabah is setting up an integrated green steel project at the Sipitang Oil and Gas Industrial Park in Sabah valued at RM20 billion.
The project will utilise natural gas supplied by Sabah Energy Corp Sdn Bhd, instead of coke and coal, with the aim of reducing carbon emissions significantly, thus positioning the project’s steel manufacturing process as low carbon, efficient and environmentally friendly.
Green Esteel also has a 61.16% interest in BRC Asia Ltd, a public company listed on the mainboard of Singapore Exchange Securities Trading Ltd.
BRC and its subsidiaries are principally involved in the prefabrication of steel reinforcement for use in concrete, trading of steel reinforcing bars, and the manufacturing and sale of wire mesh fences.
You, a Singaporean citizen, holds a direct stake of 39.69% and an indirect stake of 57.47% in Green Esteel.
He is deemed to have an interest in the shares in Green Esteel held by Advance Venture Investments Ltd and Theme International Holdings Ltd.
At present time, Green Esteel has an issued share capital of US$685.04 million (RM2.86 billion).
Southern Steel’s share price closed unchanged at 48 sen (52-week high/low: 84 sen/47 sen), resulting in a market capitalisation of RM286 million.
Source:The Malaysian Reserve