Hot rolled coils produced by Megasteel Sdn Bhd. (Pix provided by Megasteel)
KUALA LUMPUR: After 35 years as a public company, Lion Corp Bhd will be de-listed on Oct 12.
In an announcement to Bursa Malaysia on Tuesday, the steel product manufacturer said it would not appeal against Bursa Malaysia Securities’ rejection of its request for more time to submit its regularisation plan.
Bursa Securities had decided to dismiss its application for a time extension to Nov 30 as there was no material development towards the finalisation and submission of the plan to the regulatory authorities.
Bursa Securities had said Lion Corp securities would be de-listed on Oct 12 unless an appeal against the de-listing was submitted to it by this Friday (Oct 7).
“The board of directors of the company (Lion Corp) had today announced that the company has resolved that the company will not be submitting the appeal in view that all material developments in relation to the regularisation plan have been disclosed to Bursa Securities for their deliberation in arriving at the decision,” Lion Corp said.
Trading in the company’s securities will therefore be suspended from Oct 10 and then de-listed on Oct 12. Lion Corp will still continue its operations and business as an unlisted entity.
Lion Corp, which incurred annual losses for the last five financial years, has been a Practice Note 17 issuer since October 2013.
Lion Corp, which was listed in May 1981, fell into PN 17 status as its auditors Ong Boon Bah & Co expressed an emphasis of matter on the group’s ability to continue as a going concern based on its net loss of RM245.6mil for the year ended June 30, 2013, and the group’s current liabilities exceeding its current assets by RM1.9bil.
The company’s main business is manufacturing flat steel products, which is undertaken by 79% owned subsidiary Megasteel Sdn Bhd.
Last year Megasteel, the country’s largest producer of hot rolled coils (HRC), defaulted on a banker’s acceptance payment on Sept 23, 2015 in respect of a working capital facility. This default created a domino effect that gave rise to cross default provisions under the loan documents for its other facilities, which amounted to some RM3.02bil.
It was later reported that Megasteel sought trade remedy measures, including safeguard duties on HRC imports at the rate of 40% on top of the existing 15% import duties, from the Government. It claimed the imports had adversely affected its production.
However, the Malaysian Iron & Steel Industry Federation (Misif) urged the Government to reject Megasteel’s petition, saying that it has no merit. It claimed that Megasteel’s HRC prices were higher than the world average.
The International Trade and Industry Ministry (Miti) subsequently decided that the injury to the local HRC industry was not serious enough to justify the imposition of safeguard duties,
Recently Megasteel suspended the operations of its 17-year old flat steel products plant in Banting, Selangor.
According to Lion Corp, Megasteel has been suffering losses in the past several years due to excessive dumping of steel products by foreign millers and has been operating intermittently depending on market conditions.
“The announcement in January 2016 by Miti that the Government had terminated the investigation for the safeguard petition on imported HRC had further impacted Megasteel’s operations which resulted in the retrenchment of its staff.”
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