Singapore-based steel producer Green Esteel will buy a 50.1 percent stake in Malaysia-based Southern Steel for MYR 315.9 million ($72.13 million), according to a statement by Southern Steel. If the transaction is approved, Southern Steel will become a subsidiary of Green Esteel.
Southern Steel plans to use MYR 250 milion from the transaction to upgrade its steel plant, rolling mill and downstream plants, while MYR 128.67 million is expected to be allocate to fund working capital requirement.
In addition, Southern Steel plans to offer a 10.18 percent stake to investors to meet public shareholding requirements as Green Esteel becomes a major shareholder.
Southern Steel has a total annual production capacity of 150,000 mt at its mesh manufacturing plants located in Klang and Prai in Malaysia.
