Posted on 22 May 2026
Ann Joo Resources Bhd has scrapped the proposed disposal of its upstream steel business to Southern Steel Bhd, and instead inked a deal with its largest shareholder, steel magnate You Zhenhua’s Singapore-based Green Esteel Pte Ltd.
Green Esteel owns a 50.1% interest in Southern Steel.
In a filing with Bursa Malaysia, Ann Joo said it had mutually agreed with Southern Steel to terminate the heads of agreement signed on March 27, just days before a 60-day deadline, citing regulatory approval requirements and uncertainty over whether these could be secured within an acceptable timeframe.
The deal would have involved Southern Steel acquiring Ann Joo’s Ann Joo Steel Bhd (AJSB) upstream steel business and its wholly-owned subsidiary, Ann Joo Integrated Steel Sdn Bhd, but excluded certain land and property assets held under AJSB for a valuation based on RM1.005 billion in assets minus liabilities.
In a filing with Bursa Malaysia on Friday, Ann Joo said following the termination of the deal, it has now signed a conditional agreement with Green Esteel to sell the same business for an estimated RM348.7 million under the same valuation basis.
The company plans to use about 66% of the proceeds from the sale to repay the group’s bank borrowings, 33.9% for working capital, and the remainder for related expenses. The exercise is expected to result in an illustrative net gain of RM157.1 million.
You owns a 39.12% direct stake and a 56.65% indirect stake in Green Esteel. His indirect holdings are via Advance Venture Investments Ltd and Deep Source Holdings Ltd.
Ann Joo said the disposal aligns with its strategy to exit the loss-making upstream steel segment, noting that AJSB has recorded consistent losses since the financial year ended 2023 amid declining revenue and high operating costs. The move will allow the group to refocus on its downstream steel operations.
Following the disposal, Ann Joo’s net assets are expected to rise to RM923.6 million from RM745.7 million, while net asset per share is projected to improve to RM1.32 from RM1.06.
Total borrowings are set to be halved to RM630.3 million from RM1.29 billion, with gearing declining to 0.68 times from 1.73 times.
The proposed disposal is expected to be completed in the second half of 2026, subject to shareholder approval and other conditions. Maybank Investment Bank Bhd has been appointed as principal adviser for the exercise.
On Friday, shares of Ann Joo closed down half a sen or 0.76% at 65 sen, giving it a market capitalisation of RM463.87 million. Southern Steel rose half a sen or 1.25% at 40.5 sen, valuing it at RM607.95 million.
Source:The Edge
