Southern Steel has signed a non-binding agreement under which the new shares will represent at least 50.1% of the company’s expanded share capital once the deal is completed.
The proceeds from the share issuance will be used to increase Southern Steel’s production and operational capabilities, as well as support the company’s working capital.
The share issuance is seen as a faster and more cost-effective way for Southern Steel to raise funds compared to bank loans or debt instruments, which would incur interest. The collaboration is expected to create synergies between Esteel and Southern Steel, both of which operate in the steel industry.
Southern Steel anticipates that the combination of its upgraded facilities and Esteel’s expertise will improve the company’s operational efficiency, benefiting its business in the long run.
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