KUALA LUMPUR: AYS Ventures Bhd
has entered into a binding term sheet to dispose of its 74% equity interest in Singapore-based Steelaris Pte Ltd as part of a S$6.3mil (RM20.4mil) transaction.
In a filing with Bursa Malaysia, the steel products manufacturer and distributor said its indirect wholly owned subsidiary, Ann Yak Siong (Singapore) Pte Ltd (AYSS), together with two minority shareholders, will sell their combined 90% stake in Steelaris to CosmoSteel Holdings Pte Ltd.
Under the deal, AYSS will receive S$2.59mil in cash and 10.36 million new CosmoSteel shares as consideration for its stake.
AYS Ventures said the disposal forms part of the group's strategy to optimise its investment portfolio and unlock value from its investment in Steelaris.
“The transaction brings together two companies with highly complementary businesses, creating a stronger platform that is better positioned to address evolving market conditions and pursue growth opportunities,” it said.
It added that the proposed disposal provides an opportunity for Steelaris and CosmoSteel to leverage each other's established customer networks, geographical presence, operational resources and industry expertise.
AYS Ventures will recognise a gain on disposal of S$115,000 (RM364,000) after consolidation adjustments from the proposed disposal.
Following the disposal, AYSS will retain a direct 3.8% stake in CosmoSteel, while also holding an indirect interest through its 14.9% shareholding in CosmoSteel's parent company, 3HA Capital Pte. Ltd.
The cash proceeds will be used for the group's working capital, including the repayment of trade creditors and procurement of goods.
The proposed disposal is not subject to shareholders' approval and is expected to be completed by the second quarter of the financial year ending March 31, 2027.
