Green Esteel Pte Ltd, a steel company based in Singapore with significant business operations in Malaysia, is on the path to becoming the new strategic investor and controlling shareholder of Southern Steel Bhd. The proposed transaction, valued at RM 315.9 million (approximately USD 83.7 million), entails Green Esteel purchasing 752.1 million newly issued shares for RM 0.42 (USD 0.11) per share. This acquisition will provide Green Esteel with a 50.1% stake in the Malaysian steel producer.
According to Southern Steel's exchange filing today, Green Esteel and its majority shareholder, You Zhenhua, are requesting the Securities Commission’s approval for an exemption from the requirement to make a mandatory takeover offer for the remaining shares. If the exemption is granted, Southern Steel would become a subsidiary of Green Esteel and an associate company of Hong Leong Manufacturing Group Sdn Bhd.
In a related initiative, Southern Steel plans to issue up to 152.7 million additional shares through a private placement at RM 0.42 per share, representing 10.18% of the expanded share capital. This share sale, expected to raise around RM 64 million (USD 17 million), is intended to ensure Southern Steel’s compliance with public shareholding spread requirements as Green Esteel assumes a major ownership role.
With the combined RM 380 million (approximately USD 100.7 million) expected from these transactions, Southern Steel aims to allocate RM 250 million (USD 66.2 million) over the next three years to upgrade and modernize its plant and machinery.
As Green Esteel moves towards becoming a strong player in the Southeast Asian steel sector, this step will support Malaysia’s low-carbon manufacturing practices and assess strategic growth opportunities in the region.
Comments
No comment yet.