KUALA LUMPUR: AYS Ventures Bhd
’s indirect wholly-owned subsidiary Ann Yak Siong (Singapore) Pte Ltd (AYSS) has agreed to dispose of its 74% stake in Singapore-based Steelaris Pte Ltd to CosmoSteel Holdings Pte Ltd for S$5.18mil (RM16.53mil).
In a filing with Bursa Malaysia, AYS Ventures said AYSS will receive S$1.81mil in cash and 13.47 million new CosmoSteel shares at an issue price of S$0.25 each.
The disposal forms part of a wider transaction in which Steelaris’ shareholders will sell their entire stakes to CosmoSteel for a total consideration of S$7mil.
Steelaris is principally involved in the trading of steel products.
Upon completion, AYSS will hold an aggregate of 52.41 million shares or 18.9% stake, in CosmoSteel.
Additionally, AYS Ventures said the proposed disposal is part of the group’s strategy to optimise its investment portfolio and unlock value from its investment in Steelaris.
“On top of that, the proposed disposal forms part of the AYSV 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 pointed out.
The cash proceeds will be used for working capital, including the repayment of trade creditors and procurement of goods.
The group expects to recognise an estimated net loss of about RM1.03mil from the disposal.
Against this backdrop, its gearing ratio is expected to decline to 0.73 times from 0.82 times.
Upon completion, AYS Ventures will cease consolidating Steelaris’ results into the group’s financial statements.
Furthermore, the proposed disposal is expected to be completed by the third quarter of the financial year ending March 31, 2027.
