Melewar sold Melewar Steel Tube for RM70m

PETALING JAYA: Melewar Industrial Group Bhd (MIG) is planning to dispose of 100% equity interest held in Melewar Steel Tube Sdn Bhd (MST) to Mycron Steel Bhd for RM70 million.
In a filing to Bursa Malaysia on Friday, MIG said it will dispose 90 million RM1 shares in MST to Mycron via the issuance of 104.5 million shares at an issue price of 44 sen amounting to RM46 million.
There were also be a novation of debt by MIG to Mycron in relation to an amount owing by MIG to MST amounting to RM24 million.
The company said the proposed disposal is not expected to result in MIG becoming a cash company of a practice note 17 company.
"The proposed disposal of MST will not result in any gain or loss to the Melewar group," the company said.
The deal would enable MIG to streamline all of its steel businesses under Mycron.
It aims to benefit in terms of having an enlarged Mycron group with a clearer focus in the steel industry, as well as the synergistic benefits arising from combined operations and sharing of resources.
Once the disposal is completed, MIG's shareholding in Mycron is expected to increase to 71.29% from 54.79%. MIG will remain as the single largest shareholder of Mycron.
The proposal is expected to be completed by the first quarter 2015.