Singapore-based Esteel has continued to expand its presence in the Malaysian market with a new acquisition. Malaysia-based steelmaker Southern Steel Berhad has announced that it has entered into a non-binding term sheet with Esteel to issue new shares, representing no less than 50.1 percent of its enlarged issued share capital, giving the latter a controlling stake in the company. The proposed share issuance is set at a price of MYR 0.42 per share.
By issuing shares, Southern Steel aims to raise funds more efficiently and cost-effectively compared to traditional methods such as bank borrowings or issuing debt instruments. With the acquisition, which is expected to improve the operational capability of Southern Steel, Esteel and its affiliates will be required to fully purchase the remaining shares.
Meanwhile, two years ago, Esteel acquired Malaysia-based Antara Steel Mills, which has an annual production capacity of 900,000 mt of hot briquetted iron, for $165.63 million, as SteelOrbis previously reported.