[SINGAPORE] Steel fabricator BRC Asia said on Tuesday (Apr 22) it has entered into a conditional share purchase agreement to buy a controlling stake of 55 per cent in Southern Steel Mesh.
BRC Asia will buy 12.9 million shares from the company’s parent Southern Steel, for a cash consideration of RM61 million (S$18.2 million). The parent will retain a minority stake.
In late February, Singapore-listed BRC Asia said it entered a non-binding term sheet where it had contemplated buying existing and new shares in Southern Steel Mesh. BRC Asia said then that the acquisition aligns with its strategy to tap regional markets and diversify revenue streams, with the opportunity to leverage on Southern Steel’s “established market presence in Malaysia”.
Focused on the production and sales of steel wire mesh, concrete wires and other related products, Southern Steel Mesh owns four manufacturing plants in the central and northern regions of Malaysia. As at Sep 30, 2024, its book value was RM106.5 million.
A steel mill group headquartered in Malaysia, Southern Steel is listed on the main board of the country’s stock exchange.
BRC said the agreement will automatically terminate if the conditions of sale were not fulfilled or waived by Jul 31. These include the passing of an ordinary resolution by Southern Steel’s shareholders on the proposed acquisition.
BRC’s shares slid S$0.04, or 1.3 per cent, to close at S$3.03 before the announcement.
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