AI assistant
ANN JOO RESOURCES BERHAD M&A Activity 2026
70265_rns_2026-05-21_cc2be4cd-fe15-4176-9847-977200f52c57.pdf
M&A Activity
Open in viewerOpens in your device viewer
ANN JOO RESOURCES BERHAD ("AJR" OR "COMPANY" OR "SELLER")
PROPOSED DISPOSAL OF 100% EQUITY INTEREST IN ANN JOO STEEL BERHAD ("AJSB" OR "TARGET COMPANY"), A WHOLLY-OWNED SUBSIDIARY OF AJR, COMPRISING 612,993,535 ORDINARY SHARES IN AJSB ("AJSB SHARES") ("SALE SHARES"), TO GREEN ESTEEL PTE LTD ("GREEN ESTEEL" OR "BUYER") FOR CASH ("PROPOSED DISPOSAL")
- INTRODUCTION
On 27 March 2026, the Company had executed a heads of agreement ("HOA") with Southern Steel Berhad ("SSB") which outlines the principal terms and conditions of the proposed disposal of 100% equity interest in AJSB to SSB for cash. Pursuant to the HOA, both the Company and SSB have agreed to negotiate on the terms of the said proposed disposal and if agreed, to enter into a definitive share purchase agreement within 60 days from the date of the HOA or any extended date to be agreed between the parties. On 22 May 2026, the Company has announced that the Company and SSB have mutually agreed to terminate the HOA.
On behalf of the Board of Directors of AJR ("Board"), Maybank Investment Bank Berhad ("Maybank IB") wishes to announce that the Company has, on 22 May 2026, entered into a conditional sale and purchase agreement ("SPA") with Green Esteel for the Proposed Disposal.
- DETAILS OF THE PROPOSED DISPOSAL
2.1 Background information on the Proposed Disposal
The Proposed Disposal involves the following:
(i) disposal of 100% equity interest in AJSB, comprising 612,993,535 AJSB Shares and the disposal of AJSB's 100% equity interest in Ann Joo Integrated Steel Sdn Bhd ("AJIS") (collectively, "Target Group" and "Target Group Member" means any member of the Target Group);
(ii) excludes the disposal of the following lands and properties together with all buildings and other structures owned by AJSB:
(a) three pieces of land held under GM 5709, 5708 & 5735 for Lots 46239, 46238 & 46240 (formerly Lots 936, 937 & 938), Mukim & District of Selama, Perak; and
(b) a piece of land held under Geran 5398 Lot 426, Mukim 5 Province Wellesley South, Penang,
(the excluded lands and buildings are collectively referred to as "Excluded Assets"),
to Green Esteel for a cash consideration to be determined based on the formula and mechanism set out in Section 2.4 of this Announcement ("Disposal Consideration").
The Proposed Disposal is subject to the terms and conditions of the SPA, the salient terms of which are set out in Appendix I of this Announcement.
Upon completion of the Proposed Disposal, AJSB and AJIS will cease to be direct and indirect subsidiaries of AJR and will become wholly-owned subsidiaries of Green Esteel.
The group structure of AJR before and after the Proposed Disposal is as follows:
As at 15 May 2026, being the latest practicable date prior to this Announcement ("LPD")
After the Proposed Disposal
2.2 Information on AJSB
AJSB was incorporated in Malaysia on 10 October 1961 as a private limited company under the name of Malayawata Steel Limited under the Companies Ordinances, 1940-1946 and is deemed registered under the Companies Act 2016 ("Act"). On 15 April 1966, it changed its name to Malayawata Steel Berhad and was converted into a public limited company on 28 April 1966. On 8 December 2006, the company changed its name to Ann Joo Steel Berhad.
AJSB is principally involved in the business of steel mill, trading of iron, steel and steel related products, as well as investment holding. As at the LPD, AJSB has only one wholly-owned subsidiary, namely AJIS.
Further information on AJSB is set out in Appendix II of this Announcement.
2.3 Information on the Buyer
Green Esteel was incorporated in Singapore on 18 August 2017 under the laws of Singapore as a private company limited by shares. Green Esteel is principally an investment holding company and its subsidiaries are involved in, among others, steel related businesses.
As at 19 May 2026, Green Esteel's issued share capital is United States Dollar 720,617,937 comprising 742,300,000 ordinary shares ("Green Esteel Shares") (including treasury shares).
As at 19 May 2026, the directors of Green Esteel and their respective shareholding in Green Esteel are as follows:
| Designation / Nationality | Direct | Indirect | |||
|---|---|---|---|---|---|
| No. of Green Esteel Shares | % | No. of Green Esteel Shares | % | ||
| Yue Lei | Director / Singaporean | - | - | - | - |
| Wu Lei | Director / Chinese | - | - | - | - |
| You Zhenhua | Director / Singaporean | 290,365,282 | 39.12 | 420,484,718(1) | 56.65 |
Note:
(1) Deemed interest by virtue of his interest in Advance Venture Investments Limited ("Advance Venture") and Deep Source Holdings Limited ("Deep Source") pursuant to Section 4 of the Securities and Futures Act 2001 of Singapore ("SFA SG").
As at 19 May 2026, the substantial shareholders of Green Esteel and their respective shareholding in Green Esteel are as follows:
| Place of incorporation / Nationality | Direct | Indirect | |||
|---|---|---|---|---|---|
| No. of Green Esteel Shares | % | No. of Green Esteel Shares | % | ||
| You Zhenhua | Singaporean | 290,365,282 | 39.12 | 420,484,718(1) | 56.65 |
| Deep Source | Bermuda | 150,000,000 | 20.21 | - | - |
| Advance Venture | British Virgin Islands | 270,484,718 | 36.44 | - | - |
Note:
(1) Deemed interest by virtue of his interest in Advance Venture and Deep Source pursuant to Section 4 of the SFA SG.
2.4 Basis and justification for the Disposal Consideration
Pursuant to the SPA, the pricing formula which has been agreed between the Company and Green Esteel (collectively referred to as "Parties") to determine the Disposal Consideration is as follows ("Agreed Pricing Formula"):
Disposal Consideration = A + B - C
where:
A = agreed value of the non-current assets of the Target Group as at 31 December 2025 of RM1,005,000,000(1), without the Excluded Assets and the Excluded Subsidiaries (as defined below) ("Non-Current Assets")
B = aggregate value of the current assets of the Target Group ("Target Group Current Assets") as at 30 April 2026 (or such other date as may be agreed in writing between the Parties) ("Independent Audit Date")
C = aggregate sum of the total liabilities of the Target Group ("Target Group Total Liabilities") as at the Independent Audit Date
Note:
(1) Arrived at on a "willing buyer willing seller" basis after taking into consideration the non-current assets of the Target Group as at 31 December 2025 of RM840.7 million.
The Parties will, within 14 days from the date of the SPA, jointly appoint an accounting firm ("Independent Accountant") to conduct an independent audit on the management accounts of the Target Group as at the Independent Audit Date and thereafter prepare the accounts of the Target Group as at the Independent Audit Date based on the instructions jointly given by the Parties ("Independent Audit Accounts").
The Independent Accountant shall also be appointed by the Parties to compute the Disposal Consideration in accordance with the Agreed Pricing Formula. The Independent Audit Accounts, as finalised by the Independent Accountant, together with the Independent Accountant's computation of the Disposal Consideration based on the Independent Audit Accounts, shall be final and binding on the Parties and will be announced by the Company.
For illustrative purposes only, assuming the Independent Audit Date is 31 December 2025, the Disposal Consideration based on the Agreed Pricing Formula ("Illustrative Disposal Consideration") would be as follows:
| RM | |
|---|---|
| Non-Current Assets | 1,005,000,000 |
| Add: | |
| Adjusted Target Group Current Assets(1) | 349,897,498 |
| Less: | |
| Adjusted Target Group Total Liabilities(1) | (1,006,172,082) |
| Illustrative Disposal Consideration | 348,725,416 |
Note:
(1) Excluding the current assets and total liabilities of AJSB Properties Sdn Bhd ("AJSB Properties") and AJSB Land Sdn Bhd ("AJSB Land"), which were wholly-owned subsidiaries of AJSB as at 31 December 2025 (collectively, "Excluded Subsidiaries"). On 6 April 2026, AJSB had disposed its 100% equity interest in AJSB Properties and AJSB Land to Ann Joo Management Services Sdn Bhd, a wholly-owned subsidiary of AJR. The adjusted Target Group Current Assets and adjusted Target Group Total Liabilities, respectively are computed as follows:
| RM | |
|---|---|
| Current assets of AJSB | 354,449,582 |
| Less: | |
| - Current assets of AJSB Properties | (2,575,028) |
| - Current assets of AJSB Land | (1,977,056) |
| Adjusted Target Group Current Assets | 349,897,498(a) |
| Total liabilities of AJSB | 1,006,186,237 |
| Less: | |
| - Total liabilities of AJSB Properties | (12,859) |
| - Total liabilities of AJSB Land | (1,296) |
| Adjusted Target Group Total Liabilities | 1,006,172,082 |
Note:
(a) Before including the proceeds received / to be received by AJSB from the disposal of the Excluded Subsidiaries and the Excluded Assets of approximately RM34.3 million.
4
The Board is of the view that the Illustrative Disposal Consideration is justifiable after taking into consideration the following:
(i) the financial performance of the Target Group which has consistently recorded losses since the financial year ended ("FYE") 31 December 2023. The Proposed Disposal will enable the Company to stem further potential losses of the Target Group to AJR and its subsidiaries ("AJR Group") and will allow the AJR Group to refocus its resources to expanding its downstream steel business;
(ii) the implied price-to-book multiple ("PB Multiple") of 1.89 times based on the Target Group's adjusted net assets ("NA") of RM184.4 million $^{(1)}$ is above the range of PB Multiples of selected comparable companies of between 0.10 time to 0.67 time, as set out below:
| Comparable company(2) | Principal activities | Market capitalisation as at | PB Multiple(4)(times) | |
|---|---|---|---|---|
| the LPD(RM'000) | NA(3)(RM'000) | |||
| Southern Steel Berhad | The company is principally an investment holding company and is involved in the manufacturing, sale and trading of steel bars and related products, while its subsidiaries are principally involved in the manufacturing, sale and trading in billets, steel bars, wire rods, pre-stressed concrete strands, bars and wires, steel pipes, steel wires, and other related products, as well as rental of properties and investment holding. | 592,940 | 884,854 | 0.67 |
| Malaysia Steel Works (KL) Berhad | The company is principally involved in the manufacturing and marketing of high tensile steel bars, mild steel bars and prime steel billets. | 201,088 | 990,865 | 0.20 |
| Lion Industries Corporation Berhad | The company is principally an investment holding company, while its subsidiaries are principally involved in the manufacturing and marketing of steel bars, wire rods, and hot briquetted iron as well as developing and managing properties. | 98,717 | 989,805 | 0.10 |
| CSC Steel Holdings Berhad | The company is principally an investment holding company, while its subsidiaries are principally involved in the manufacturing and marketing of steel products. The company's products include steel pipes, cold rolled coils, steel sheets and galvanized steel products. | 550,257 | 943,189 | 0.58 |
| Comparable company^{(2)} | Principal activities | Market capitalisation as at the LPD
(RM'000) | NA^{(3)}
(RM'000) | PB Multiple^{(4)}
(times) |
| --- | --- | --- | --- | --- |
| Mycron Steel Berhad | The company is principally an investment holding company, while its subsidiaries are principally involved in the manufacturing of cold rolled steel sheets in coils and operating cold rolling mill factory. | 85,035 | 517,489 | 0.16 |
| Minimum | | | | 0.10 |
| Maximum | | | | 0.67 |
| Average | | | | 0.34 |
Notes:
(1) The adjusted NA of the Target Group is arrived at as follows:
| RM | |
|---|---|
| Audited NA of AJSB as at 31 December 2025 | 193,620,348 |
| Less: | |
| - Audited NA of AJSB Properties as at 31 December 2025 | (3,074,844) |
| - Audited NA of AJSB Land as at 31 December 2025 | (1,975,760) |
| - Audited net book value of the Excluded Assets as at 31 December 2025 | (4,154,250) |
| Adjusted NA of the Target Group | 184,415,494^{(a)} |
Note:
(a) Before taking into consideration the proceeds received / to be received by AJSB from the disposal of the Excluded Subsidiaries and the Excluded Assets of approximately RM34.3 million and the corresponding gain on disposal of the Excluded Assets of approximately RM25.1 million.
(2) It should be noted that the list of comparable companies is not exhaustive and may not be directly comparable to the Target Group due to various factors which include, among others, capital and shareholding structure, geographical and coverage of business activities, operating history, profit track record, financial strength, risk profile and marketability of their securities. The comparable companies are listed on the Main Market of Bursa Malaysia Securities Berhad (“Bursa Securities”) and were selected based on their respective principal activities in the steel industry with involvement in the steel manufacturing segment, which is broadly comparable to the principal activities of the Target Group. The comparable companies have also been identified on a best effort basis based on publicly available information and were selected for illustrative purposes only.
(3) Based on the latest available audited NA of the comparable companies as at the LPD.
(4) Computed based on market capitalisation divided by NA.
(iii) the Target Group will continue as a going concern and Green Esteel will assume the loss-making business of the Target Group and the Target Group Total Liabilities including the borrowings of the Target Group of RM660.3 million as at 31 December 2025;
(iv) illustrative net proforma gain on disposal of RM157.1 million which is expected to improve the NA and earnings of the AJR Group as illustrated in Sections 6.2 and 6.3 of this Announcement; and
(v) rationale and benefits of the Proposed Disposal as set out in Section 3 of this Announcement.
2.5 Mode of settlement of the Disposal Consideration
The Disposal Consideration will be fully satisfied in cash in the following manner:
| Description of payment | Timing of settlement | Amount (RM) |
|---|---|---|
| Deposit^{(1)} | Within three business days from the execution of the SPA | 70,000,000 |
| Completion amount | On completion date of the SPA (“Completion Date”) | Disposal Consideration minus RM140.0 million (i.e. deposit plus retention sum of RM70,000,000) |
| Retention sum^{(2)} | Within five business days after the expiry of three months from the Completion Date | 70,000,000^{(3)} |
Notes:
(1) Further information on the deposit is set out in Appendix I of this Announcement.
(2) The retention sum held by Green Esteel shall first be applied against any losses incurred by Green Esteel exceeding RM500,000 in a single claim arising from or in connection with any breach by the Company under or pursuant to the SPA.
(3) The amount released to the Company may be less than RM70.0 million as the retention sum is subject to any potential deductions by Green Esteel due to losses incurred by Green Esteel, if any, as stated in Note 2 above.
2.6 Original cost of investment
The date and original cost of investment by the Company in AJSB are as follows:
| Date of investment | No. of AJSB Shares | Cost of investment (RM) |
|---|---|---|
| 16 August 2000 | 60,548,526 | 203,699,755.00 |
| 27 February 2004 | 4,075,637 | 8,980,251.00 |
| 11 October 2005 to 15 December 2005 | 1,887,400 | 2,764,000.00 |
| 30 December 2005 to 29 March 2007 | 69,908,512 | 104,862,768.00 |
| 30 March 2007 to 25 July 2007 | 55,631,737 | 172,458,384.70 |
| 25 October 2007 to 24 September 2008 | 5,683,426 | 17,080,423.80 |
| 25 September 2023 | 311,823,000 | 424,079,280.00 |
| 31 December 2024 | 103,435,297 | 68,267,297.46 |
| Total | 612,993,535 | 1,002,192,159.96 |
8
2.7 Liabilities to remain and guarantees to be given
Save for the liabilities and indemnities arising from the SPA, there are no other liabilities, including contingent liabilities, which will remain with the Company after the Proposed Disposal.
In addition, there is no guarantee to be given by the Company to Green Esteel pursuant to the Proposed Disposal.
2.8 Cash company or Practice Note ("PN") 17 company
Based on the audited consolidated financial statements of the Company for the FYE 31 December 2025, the Proposed Disposal will not result in the Company becoming a cash company or a PN17 company as defined under the Main Market Listing Requirements of Bursa Securities ("Listing Requirements").
- RATIONALE AND BENEFITS OF THE PROPOSED DISPOSAL
The Proposed Disposal is in line with the strategy of the AJR Group to exit the upstream steel business. The Proposed Disposal will enable the Company to stem further potential losses of the Target Group to the AJR Group and will allow the AJR Group to refocus its resources to expanding its downstream steel business which include, but is not limited to, steel related businesses such as steel fabrication works and engineering services for the automotive and electricity sectors, and engineering, design and construction works for the electrification industry.
In addition, the illustrative net proforma gain on disposal of RM157.13 million arising from the Proposed Disposal is expected to improve the NA and earnings of the AJR Group, as illustrated in Sections 6.2 and 6.3 of this Announcement.
- UTILISATION OF PROCEEDS
Based on the Illustrative Disposal Consideration, the gross proceeds of RM348.7 million would be utilised in the following manner:
| Description of utilisation | RM'000 | % | Estimated timeframe for utilisation upon completion of the Proposed Disposal |
|---|---|---|---|
| Repayment of bank borrowings(1) | 230,000 | 66.0 | Within 12 months |
| Working capital(2) | 118,225 | 33.9 | Within 12 months |
| Defray expenses relating to the Proposed Disposal(3) | 500 | 0.1 | Within 1 month |
| Total | 348,725 | 100.0 |
Notes:
(1) As at the LPD, the AJR Group's total bank borrowings stood at approximately RM1,290.8 million. Upon completion of the Proposed Disposal, the total borrowings of the AJR Group will reduce to RM630.3 million as illustrated in Section 6.2 of this Announcement.
The AJR Group intends to repay RM230.0 million of its trade financing facilities, which is primarily banker's acceptances / invoice financing from multiple banks. The interest / profit rates on these borrowings typically range from 3.27% to 4.61% based in part on the tenure of the borrowings. Based on the estimated average annual interest rate of these borrowings of 4.00%, the repayment of bank borrowings of RM230.0 million is expected to result in annual gross interest savings of approximately RM9.2 million to the AJR Group. However, the actual interest savings may vary depending on the applicable interest rate at the time of repayment.
(2) The working capital is meant to finance the day-to-day operations which include settlement of trade and other payables as well as general operating and administrative expenses. The breakdown of proceeds to be used for each component of working capital is set out below:
| Description | RM'000 |
|---|---|
| Settlement of trade and other payables | 110,225 |
| General operating and administrative expenses(i) | 8,000 |
| Total | 118,225 |
Note:
(i) Including staff-related costs (such as salaries, allowances and statutory contributions for the AJR Group's staff), insurance, office running expenses and other miscellaneous items (such as audit fees, professional fees, consultancy fees and secretarial fees).
(3) The expenses relating to the Proposed Disposal comprise professional fees, regulatory fees and other incidental expenses such as printing and despatch costs, advertising costs and extraordinary general meeting ("EGM") costs.
Any surplus or shortfall in the funds allocated for the expenses relating to the Proposed Disposal against the actual expenses incurred will be adjusted accordingly to/from the amount allocated for working capital purposes.
Pending utilisation of the cash proceeds to be raised from the Proposed Disposal for the above purposes, the cash proceeds will be placed in profit / interest bearing deposit(s) with licensed financial institution(s) and/or short-term money market instrument(s). The interest derived from such deposit(s) and/or any gain arising from such short-term money market instrument(s) will be utilised for the future working capital requirements of the AJR Group.
Notwithstanding, the Company will announce the actual utilisation of proceeds once the Disposal Consideration has been computed and determined by the Independent Accountant.
5. RISK FACTORS
The risk factors relating to the Proposed Disposal are as follows:
(i) Completion risk
The completion of the Proposed Disposal is subject to, among others, the fulfilment of the conditions precedent of the SPA as set out in Appendix I of this Announcement ("Conditions Precedent").
There can be no assurance that the Conditions Precedent will be satisfied or waived, as the case may be, within the stipulated timeframe or any of the termination events will not occur such that the Proposed Disposal cannot be completed. Any delay in the fulfilment of the Conditions Precedent may lead to a delay in the completion and/or termination of the Proposed Disposal, and the benefits arising from the proposed utilisation of proceeds arising from the Proposed Disposal may be deferred or may not materialise.
Notwithstanding, the Company will take all necessary and reasonable steps to ensure the fulfilment of the Conditions Precedent which are within the Company's control within the stipulated timeframe as well as mitigate the occurrence of any of the termination events that are within the Company's control. Further, as at the date of the SPA, the controlling shareholders of the Company, namely Ann Joo Corporation Sdn Bhd, Lim Seng Chee & Sons Sdn Bhd and LSQ & Sons Sdn Berhad have given an irrevocable undertaking to Green Esteel where from the date of the SPA until the date of the Company's EGM to be convened for the Proposed Disposal, they will:
(a) maintain more than 50% shareholding and voting rights in the Company; and
(b) exercise all their voting rights at the Company's EGM to vote in favour of the members' resolution to approve the Proposed Disposal,
(to be referred to as "Irrevocable Undertakings").
(ii) Contractual risk
The Company has given representations, warranties, covenants, undertakings and indemnities, as set out in the SPA, in favour of Green Esteel. In this respect, the Company may be subject to claims in accordance with the terms and conditions of the SPA if such representations, warranties, covenants, undertakings and indemnities are breached. In this regard, the Company will take all reasonable steps to ensure compliance with its obligations under the SPA in order to minimise the risk of any breach of the representations, warranties, covenants, undertakings and/or indemnities given.
(iii) Loss of revenue and income from the Target Group
Upon completion of the Proposed Disposal, AJSB and AJIS will cease to be wholly-owned subsidiaries of the Company and as such, AJR will no longer consolidate the revenue of the Target Group. Nevertheless, the Target Group has been loss-making and as such, the Proposed Disposal is not expected to result in any material adverse effect on the AJR Group's future financial performance.
10
11
6. EFFECTS OF THE PROPOSED DISPOSAL
The effects of the Proposed Disposal have been shown based on the Illustrative Disposal Consideration. The Company will announce the effects of the Proposed Disposal once the Disposal Consideration has been computed and determined by the Independent Accountant.
6.1 Issued share capital and substantial shareholders' shareholding
The Proposed Disposal will not have any effect on the issued share capital and substantial shareholders' shareholding in the Company as the Proposed Disposal does not involve the issuance of new ordinary shares in AJR ("AJR Shares").
6.2 NA per AJR Share and gearing
For illustrative purposes only, based on the audited consolidated statements of financial position of the Company as at 31 December 2025 and assuming that the Proposed Disposal had been effected on that date, the proforma effects of the Proposed Disposal on the NA per AJR Share and gearing of the AJR Group are as follows:
| Audited as at 31 December 2025 | (I) Subsequent events up to the LPD^{(1)} | (II) After (I) and the Proposed Disposal | |
|---|---|---|---|
| RM'000 | RM'000 | RM'000 | |
| Share capital | 714,852 | 714,852 | 714,852 |
| Treasury shares | (55,620) | (55,620) | (55,620) |
| Other reserves | 120,291 | 120,291 | 67,566 |
| Retained earnings | (33,821) | (12,549) | 196,805^{(2)} |
| Equity attributable to owners of the Company / NA | 745,702 | 766,974 | 923,603 |
| No. of AJR Shares in issue ('000)^{(3)} | 701,740 | 701,740 | 701,740 |
| NA per AJR Share (RM)^{(4)} | 1.06 | 1.09 | 1.32 |
| Total borrowings | 1,290,766 | 1,290,639 | 630,304 |
| Gearing (times)^{(5)} | 1.73 | 1.68 | 0.68 |
Notes:
(1) Adjusted for the subsequent event after the FYE 31 December 2025 comprising the following ("Subsequent Event"):
(a) Disposal by Ann Joo Green Energy Sdn Bhd ("AJGE"), a wholly-owned subsidiary of the Company, of 5,381,226 ordinary shares in Bumi Segar Indah Sdn Bhd ("Bumi Segar") for a cash consideration of RM15.1 million and the capitalisation of outstanding shareholder's advances previously extended to Bumi Segar by AJGE of RM74.1 million into redeemable preference shares in Bumi Segar. This disposal was completed on 27 February 2026.
(2) After taking into consideration the illustrative net proforma gain on the Proposed Disposal of approximately RM157.1 million as set out in Note (2), Section 6.3 of this Announcement and the reclassification of revaluation reserve of RM52.2 million to retained earnings.
(3) Excluding 17,194,900 treasury shares in the Company.
(4) Computed based on NA divided by number of AJR Shares in issue.
(5) Computed based on total borrowings divided by NA.
12
6.3 Earnings and earnings per AJR Share
For illustrative purposes only, based on the audited consolidated statement of profit or loss and other comprehensive income of the Company for the FYE 31 December 2025 and assuming that the Proposed Disposal had been effected on 1 January 2025, being the beginning of the FYE 31 December 2025, the proforma effects of the Proposed Disposal on the earnings of the AJR Group and earnings per AJR Share are as follows:
| | FYE 31
December 2025 | (I)
Subsequent
events up to the
LPD^{(1)} | (II)
After (I) and the
Proposed
Disposal |
| --- | --- | --- | --- |
| | RM'000 | RM'000 | RM'000 |
| Loss attributable to the
owners of the Company ("LATAMI") | (255,867) | (255,867) | (234,595) |
| Add:
Illustrative net proforma gain on the
Proposed Disposal^{(2)} | - | 21,272 | 157,133 |
| Proforma consolidated LATAMI
after the Proposed Disposal | (255,867) | (234,595) | (77,462) |
| No. of AJR Shares in issue (RM'000)^{(3)} | 701,740 | 701,740 | 701,740 |
| Loss per AJR Share (sen) | (36.46) | (33.43) | (11.04) |
Notes:
(1) After taking into consideration the Subsequent Event as set out in Note (1), Section 6.2 of this Announcement.
(2) After taking into consideration the illustrative net proforma gain on the Proposed Disposal of approximately RM157.1 million which has been computed as follows:
| RM'000 | |
|---|---|
| Illustrative Disposal Consideration | 348,725 |
| Less: | |
| Adjusted NA of the Target Group as at 31 December 2025 | (184,415) |
| Goodwill | (7,182) |
| Estimated expenses relating to the Proposed Disposal | (500) |
| Add: | |
| Hedging reserve reclassified to profit or loss | 505 |
| 157,133 |
(3) Excluding 17,194,900 treasury shares in the Company.
- APPROVAL / CONSENT REQUIRED
The Proposed Disposal is subject to the approval of the shareholders of the Company at an EGM to be convened.
As set out in Section 5(i) of this Announcement, the controlling shareholders of the Company, namely Ann Joo Corporation Sdn Bhd, Lim Seng Chee & Sons Sdn Bhd and LSQ & Sons Sdn Berhad have provided the Irrevocable Undertakings.
The Proposed Disposal is not conditional upon any other corporate exercise/scheme of the Company.
- PERCENTAGE RATIO
The highest percentage ratio applicable to the Proposed Disposal pursuant to Paragraph 10.02(g) of the Listing Requirements is 85.4%, calculated based on the loss after taxation of the Target Group (after excluding the contribution from the Excluded Subsidiaries) for the FYE 31 December 2025 compared with the audited consolidated LATAMI of the Company for the FYE 31 December 2025.
- INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED WITH THEM
None of the Directors and major shareholders of the Company as well as persons connected with them have any interest, direct or indirect, in the Proposed Disposal.
- DIRECTORS' STATEMENT / RECOMMENDATION
The Board, after having considered all aspects of the Proposed Disposal including but not limited to, the salient terms of the SPA, basis and justification for the Disposal Consideration, rationale, benefits and risk factors of the Proposed Disposal as well as the effects of the Proposed Disposal, is of the view that the Proposed Disposal is in the best interest of the Company.
- ADVISER
Maybank IB has been appointed as Principal Adviser to the Company for the Proposed Disposal.
- ESTIMATED TIMEFRAME FOR COMPLETION
Barring unforeseen circumstances and subject to relevant required approval being obtained, the Proposed Disposal is expected to be completed by the second half of 2026.
- DOCUMENT AVAILABLE FOR INSPECTION
The SPA will be available for inspection at the registered office of the Company at Wisma Ann Joo, Lot 19391, Batu 8½, Jalan Klang Lama, 46000, Petaling Jaya, Selangor, during normal business hours from Monday to Friday (except public holidays) for a period of three months from the date of this Announcement.
This Announcement is dated 22 May 2026.
SALIENT TERMS OF THE SPA
APPENDIX I
1. SALE AND PURCHASE OF THE SALE SHARES
The Seller shall, as legal and beneficial owner, sell to the Buyer (all and not part only of) the Sale Shares, and the Buyer, relying on the representations, warranties and undertakings of the Seller contained in the SPA, shall purchase the Sale Shares, free from all claims and encumbrances and with all rights, benefits and entitlements attaching thereto as at Completion Date and thereafter.
The sale and purchase of the Sale Shares shall be made on the basis that:
(a) the Target Company shall, as from the date of the SPA until the Completion (as defined in paragraph 2(c) of this Appendix), hold the entire issued share capital of AJIS free from encumbrances and have no other subsidiaries other than AJIS;
(b) the entire equity interest in the Excluded Subsidiaries, the two (2) pieces of land held by AJSB Properties under PN 5587 & 5588, Lots 106006 & 106007, Mukim Hulu Kinta, District of Kinta, Perak and the Excluded Assets do not form part of the sale and purchase transaction; and
(c) the Excluded Assets shall be transferred to the Seller or the Seller's nominee on or before the Completion Date.
2. DISPOSAL CONSIDERATION, DEPOSIT, COMPLETION AMOUNT AND RETENTION SUM
(a) The consideration for all the Sale Shares shall be an amount in cash equal to the sum of RM1,005,000,000.00 (Ringgit One Billion and Five Million), being the agreed value of the Non-Current Assets, plus the aggregate value of the current assets of the Target Group as specified in the Independent Audit Accounts as at the Independent Audit Date minus the aggregate sum of the total liabilities of the Target Group which are recorded in the Independent Audit Accounts, to be determined as at the Independent Audit Date.
(b) For purposes of the Disposal Consideration, the Parties agree to the following principles:
(i) the figure of RM1,005,000,000.00 (Ringgit One Billion and Five Million) has been arrived at on a "willing buyer willing seller" basis;
(ii) the agreed figure of RM1,005,000,000.00 (Ringgit One Billion and Five Million) for the Non-Current Assets:
(A) will not need to be adjusted for the purposes of computing the Disposal Consideration amount to cater to the non-existence of Non-Critical Assets (as defined below) that have been consumed by the Target Group between 1 January 2026 and the Independent Audit Date in the Target Group's respective operations.
"Non-Critical Assets" means Non-Current Assets which are not Critical Assets.
"Critical Assets" means Non-Current Assets which initial purchase value exceeded RM100,000 (Ringgit One Hundred Thousand);
(B) will need to be reduced by any sum paid or payable to the Target Group from a sale, transfer or any disposal (other than consumed in operations) of a Non-Critical Asset between 1 January 2026 and the Independent Audit Date;
SALIENT TERMS OF THE SPA (Cont'd)
APPENDIX I
(iii) there will be no double counting when computing the Disposal Consideration; and
(iv) all the Critical Assets must be owned and possessed by the respective Target Group Member, free from any encumbrances (save for encumbrances disclosed to the Buyer in writing) on Completion Date.
(c) The Buyer shall within three (3) business days from the execution of the SPA, pay to the Seller a sum of RM70,000,000.00 (Ringgit Seventy Million) as the deposit ("Deposit"), to be held by the Seller upon the terms of the SPA. If completion of the sale and purchase of the Sale Shares ("Completion") occurs, the Deposit shall be applied towards part satisfaction of the Disposal Consideration on Completion.
(d) In the event there is a termination of the SPA due to a material breach by the Buyer, the Seller shall be entitled to forfeit the Deposit as agreed liquidated damages for such default by the Buyer if the Seller exercised its right to terminate the SPA, and upon such forfeiture by the Seller, the Seller shall cease to have any rights or claims against the Buyer.
(e) In the event there is a termination of the SPA due to a material breach by the Seller, the Seller shall within five (5) business days from the termination of the SPA, refund the Deposit to the Buyer and pay the Buyer a further sum of RM70,000,000.00 (Ringgit Seventy Million) as agreed liquidated damages and thereafter the Buyer shall cease to have any rights or claims against the Seller under the SPA, save in respect of any antecedent breach of the SPA.
(f) In the event there is a termination of the SPA due to no fault of any party, the Seller shall refund the Deposit to the Buyer within five (5) business days from the termination or lapsing of the SPA and thereafter, no party shall have any rights or claims against the other party under the SPA.
(g) On the Completion Date, against compliance by the Seller with the completion provisions in the SPA, the Buyer shall pay to the Seller a sum equal to the Disposal Consideration minus the Deposit minus the Retention Sum (as defined in paragraph 2(i) of this Appendix ("Completion Amount").
(h) The Buyer may retain from the Disposal Consideration, for a period of three (3) months from the Completion Date, a sum of RM70,000,000.00 (Ringgit Seventy Million) which the Parties agree may be applied by the Buyer in whole or in part, against any losses exceeding RM500,000.00 (Ringgit Five Hundred Thousand) in a single claim incurred by the Buyer arising from or in connection with any breach by the Seller under the SPA or in the agreed deed of tax indemnity or by the Seller's controlling shareholders under the Irrevocable Undertakings of any representation, warranty, covenant, indemnity or other obligation thereunder ("Retention Sum").
(i) Any unutilised portion of the Retention Sum as at the expiry of three (3) months from the Completion Date shall be released and paid to the Seller within five (5) business days thereafter. Such release shall not prejudice the Buyer's rights and remedies under the SPA, including its right to bring claims against the Seller for any breach of representation, warranty, covenant, undertaking, indemnity or other obligation under the SPA.
15
SALIENT TERMS OF THE SPA (Cont'd)
APPENDIX I
3. DETERMINATION OF DISPOSAL CONSIDERATION AND INDEPENDENT AUDIT ACCOUNTS
(a) Within fourteen (14) days from the date of the SPA, the Parties will mutually appoint the Independent Accountant to conduct an independent audit on the management accounts of the Target Group as at the Independent Audit Date ("Relevant Management Accounts"), such audit to be conducted in accordance with the agreed upon instructions given by the Parties to the Independent Accountant ("Independent Audit Instructions"), which shall prevail over any assumptions in the Target Group's audited financial statements for the FYE 31 December 2025 ("Audited Accounts"). The Independent Accountant shall thereafter prepare the Independent Audit Accounts in accordance with the Independent Audit Instructions, which accounts shall be based on their findings further to their audit of the Relevant Management Accounts.
(b) The Independent Accountant shall also be appointed by the Buyer and the Seller to calculate the Disposal Consideration based on the Independent Audit Accounts and shall take into account the principles set out in paragraphs 2(a) and (b) of this Appendix. Thereafter the Independent Accountant shall notify the Buyer and the Seller of the figure determined by the Independent Accountant to constitute the Disposal Consideration.
(c) The Independent Audit Accounts as finalised by the Independent Accountant as well as their calculation of the Disposal Consideration based on the Independent Audit Accounts shall be final and binding on the Parties. Notwithstanding the Target Group's financial performance during the Transition Period (as defined in paragraph 6(b) of this Appendix) results in a net profit or net loss during such period, the Parties agree the Disposal Consideration figure as determined by the Independent Accountant will not be revised. The costs of the Independent Accountant shall be shared by the Buyer and the Seller equally.
4. CONDITIONS PRECEDENT
(a) Completion is conditional upon the following conditions being satisfied or waived on or before the date falling five (5) months from the date of the SPA or such other date as the Parties may mutually agree in writing ("Long-Stop Date"):
(i) approval being obtained at an EGM of the shareholders of the Seller in respect of the sale of the Sale Shares to the Buyer for the Disposal Consideration amount;
(ii) the sale and purchase of the Sale Shares as contemplated in the SPA not being prohibited or restricted by any law of Malaysia including prohibited by court or governmental order; and
(iii) approval, consent or permit being obtained by the Buyer or granted to the Buyer, which is required by virtue of the Buyer being a foreign interest, for the purchase of the Sale Shares or if there is such a condition in any licence or concession or right of use granted or issued to a Target Group Member.
(b) In the event that any of the Conditions Precedent is not fulfilled (due to no fault of the Buyer or the Seller) on or before the Long-Stop Date, the provisions regarding the Deposit shall apply and thereafter, the SPA (other than the agreed surviving provisions) shall lapse and cease to have further effect and no party shall have any claim against any other party, save in respect of any antecedent breach of the SPA.
16
SALIENT TERMS OF THE SPA (Cont'd)
APPENDIX I
5. COMPLETION
Subject to the satisfaction or waiver (as the case may be) of the Conditions Precedent, Completion shall take place on the date falling five (5) business days from whichever is the later to occur of: (i) the last Condition Precedent is satisfied; and (ii) the Independent Accountant notifying the Parties of the Disposal Consideration figure as calculated based on the Independent Audit Accounts, or such other date as may be agreed in writing by the Parties or deferred.
6. PRE-COMPLETION UNDERTAKING
(a) Pending Completion, Seller shall procure that the Target Group continues to carry on their respective businesses in the ordinary course of business and in substantially the same manner as the business has been carried on immediately before the date of the SPA.
(b) Commencing from a date agreed between the Parties ("Transition Date") and up to Completion ("Transition Period"), the Seller shall procure that the Target Group shall not, without the prior written consent of the Buyer, take various action including action outside the ordinary course of the Target Group's business such as incurring new borrowings or creating new security over its assets or entering into any guarantee or indemnity, granting loans entering into, terminating or amending any material contract, disposing of shares in AJIS, paying dividends, acquire any shares, assets or business or alter the share capital of the Target Company or AJIS in any way.
7. WARRANTIES
(a) The Seller represents and warrants to and undertakes with the Buyer, that various warranties set out in the SPA ("Warranties" and each a "Warranty") are true and accurate as at the date of the SPA, and the Seller acknowledges that the Buyer is entering into the SPA in reliance on among others, the Warranties and that the Buyer shall be entitled to treat the same as conditions of the SPA.
(b) In the event that there is any breach of Warranties that the Buyer may be compensated for its loss in monetary terms and either (i) full provision has been made in the Audited Accounts or the Independent Audit Accounts for loss arising out of this breach of Warranty; or (ii) all or part of the Retention Sum still remains with the Buyer and such amount is sufficient to fully compensate the Buyer for its loss, the Buyer shall in the case of (i), not make any claim against the Seller and in the case of (ii), make a deduction from the Retention Sum in accordance with the SPA, and the Buyer agrees that in these two (2) said circumstances, the breach of Warranty by the Seller shall not entitle the Buyer to exercise its rights to terminate the SPA.
(c) The Seller represents and warrants to and undertakes with the Buyer that:
(i) subject to paragraph 7(c)(ii) below, the Warranties will be fulfilled, repeated and will be true and correct in all respects and not misleading at the Transition Date as if they had been entered into afresh at the Transition Date and with reference to the circumstances then existing at the Transition Date; and
(ii) certain agreed fundamental warranties ("Fundamental Warranties" and each a "Fundamental Warranty") will be fulfilled, repeated and will be true and correct in all respects and not misleading at the Completion Date as if they had been entered into afresh at the Completion Date and with reference to the circumstances then existing at the Completion Date.
17
SALIENT TERMS OF THE SPA (Cont'd)
APPENDIX I
8. INDEMNITY
(a) Subject to paragraphs 8(b) and 9 below, the Seller undertakes that it will indemnify the Buyer from all and any losses which may be incurred, or claims made by any persons against a Target Group Member and/or the Buyer, or losses which a Target Group Member and/or the Buyer may suffer as a result of any of the following:
(i) any breach of the Warranties by the Seller or breach by the Seller's controlling shareholders under the Irrevocable Undertakings (collectively, "Seller Party");
(ii) any failure by a Seller Party to perform its obligations, undertakings or agreements or observe the terms in the SPA or the Irrevocable Undertakings;
(iii) any transaction effected by a Target Group Member before the Transition Date or effected by a Target Group Member during the Transition Period and which is a breach or deemed breach by the Seller pursuant to the SPA;
(iv) any liabilities howsoever arising out of or in connection with (A) any agreement entered into by a Target Group Member before the Transition Date; or (B) any agreement entered into by a Target Group Member during the Transition Period and which is a breach or deemed breach by the Seller pursuant to the SPA;
(v) any event, matter, act, omission, transaction or circumstance (each an "Event") occurring before the Transition Date, involving a Target Group Member, whether or not such Event was disclosed to the Buyer before or after the execution of the SPA, save where full provision for the loss has been made in the Independent Audit Accounts and/or otherwise duly compensated by the Seller;
(vi) any claim, demand, or any other form of litigation or dispute resolution proceedings (including any appeal) against a Target Group Member, in each case arising from any Event occurring before the Transition Date, provided that if requested by the Seller, the Buyer shall procure the applicable Target Group Member to subrogate to the Seller, the applicable Target Group Member's rights in such instance to elect to appoint (at the Seller's costs), a tax or other adviser to act on the Target Group Member's behalf and in the name of the Target Group Member in such proceeding and/or settle any such claim.
(b) If the SPA is terminated due to a material default of the Buyer, the Buyer undertakes to the Seller that it will on demand, indemnify and keep the Seller harmless from and against the following:
(i) all losses which may be incurred by a Target Group Member and/or the Seller after the Transition Date; or
(ii) claims made or brought by any person against a Target Group Member and/or the Seller; or
(iii) losses which a Target Group Member and/or Seller may suffer or incur or assume, in each case as a result of, or in relation to, any agreement, transaction, exercise, undertaking or other action proposed, requested, directed or approved by the Buyer in relation to the Target Group during the Transition Period.
18
SALIENT TERMS OF THE SPA (Cont'd)
APPENDIX I
(c) While the Seller is generally not liable to the Buyer for losses if any, incurred by the Buyer or a Target Group Member with effect from the Transition Date, the Seller shall be deemed to have breached its obligations and be liable to the Buyer for losses howsoever incurred by the Buyer or a Target Group Member with effect from the Transition Date arising from any one of the following:
(i) the Seller being in breach of a Fundamental Warranty and where no exception to such Fundamental Warranty has been disclosed to the Buyer in writing;
(ii) the Seller or Target Group Member failing to obtain the Buyer's prior written consent to any matter requiring the Buyer's consent during the Transition Period that are referred to in the SPA;
(iii) the Seller or Target Group Member not complying with:
(A) any condition imposed by the Buyer when the Buyer provided its consent referred to in paragraph 8(c)(ii) above; or
(B) any other instructions or requests given by the Buyer during the Transition Period in respect of a Target Group Member;
(iv) any illegal act or conduct committed by, or affecting, a Target Group Member during the Transition Period;
(v) any deviation during the Transition Period by any Target Group Member from the past business practices of the Target Group, which deviation was not pursuant to any request or instruction of the Buyer; or
(vi) the carrying on during the Transition Period, by any Target Group Member, of any business or activity which is not within its ordinary course of business.
- BREACHES OF THE SPA
(a) In the event of a breach of the SPA (other than the non-payment of the Deposit or the Completion Amount when due):
(i) if quantifiable and resulting in a loss either to the non-defaulting party and/or to the Target Group of RM500,000.00 (Ringgit Five Hundred Thousand) or less in a single claim, the breach shall not be considered as a "Material" breach and the non-defaulting party does not have the right to terminate the SPA or to claim such loss;
(ii) if quantifiable and resulting in a loss either to the non-defaulting party and/or to the Target Group exceeding RM500,000.00 (Ringgit Five Hundred Thousand) in a single claim and less than RM70,000,000.00 (Ringgit Seventy Million) in aggregate, the breach shall not be considered as a "Material" breach and the non-defaulting party does not have the right to terminate the SPA, but the non-defaulting party shall be entitled to claim and the defaulting party shall duly compensate for such loss (by an adjustment of the Disposal Consideration payable in the event of the Seller's breach) unless the breach is duly remedied by the defaulting party within the Remedy Period (as defined in paragraph 9(b) of this Appendix);
SALIENT TERMS OF THE SPA (Cont'd)
APPENDIX I
(iii) if quantifiable and resulting in a loss either to the non-defaulting party and/or to the Target Group of RM70,000,000.00 (Ringgit Seventy Million) or more in aggregate, the breach shall be considered a “Material” breach and the non-defaulting party shall be entitled to terminate the SPA with immediate effect by giving written notice to the defaulting party (in addition to its claim for damages or other remedies) unless the breach is duly remedied or compensated by the defaulting party within the Remedy Period; and
(iv) if not quantifiable and substantially defeats the purpose of the SPA, the breach shall be considered a “Material” breach and the non-defaulting party shall be entitled to terminate the SPA with immediate effect by giving written notice to the defaulting party (in addition to its claim for damages or other remedies) unless the breach is duly remedied within the Remedy Period and the defaulting party shall be given the opportunity to remedy the breach pursuant to the SPA,
and, in the event of any conflict or inconsistency between paragraph 9(a) and any other clause of the SPA or other related agreement, paragraph 9(a) shall be taken as the overriding clause.
(b) Any party who has defaulted in its obligations under the SPA shall be entitled to a period of not less than thirty (30) days to remedy such breach if the breach is capable of being remedied (“Remediable Breach”). Forthwith upon it becoming aware, the non-defaulting party shall give the defaulting party, a written notice of the occurrence of the Remediable Breach which shall also specify the period within which the defaulting party is given to remedy the Remediable Breach, which period (“Remedy Period”) shall be at least thirty (30) days from the date of the written notice and may be extended by the non-defaulting party in its absolute discretion.
(c) A “Material” breach (which will entitle the non-defaulting party to terminate the SPA) means a breach:
(i) by the Buyer, means a failure by the Buyer to pay the Deposit and the Completion Amount when due;
(ii) by the Seller, means a non-fulfilment of the Conditions Precedent due to a default by the covenantors of the Irrevocable Undertakings or a breach by the Seller (whether of a warranty, indemnity, undertaking or otherwise) under the SPA which if quantifiable, has resulted in a loss either to the Buyer or to the Target Group of RM70,000,000.00 (Ringgit Seventy Million) or more in aggregate, or a breach which substantially defeats the purpose of the SPA (as described in the SPA), and which is not remedied during the agreed Remedy Period.
- SPECIFIC PERFORMANCE
In view of the Parties’ respective rights and obligations in the SPA which are unique, in the event of a breach of the SPA by a party, monetary compensation is not an adequate remedy for the other party. Without prejudice to each party’s other rights and remedies under the SPA, the Seller and the Buyer shall each be entitled to the remedy of specific performance and injunctive relief as may be applicable against the other party in addition to damages and any other relief or remedy to which it may be entitled in law or equity.
20
SALIENT TERMS OF THE SPA (Cont'd)
APPENDIX I
11. RESTRICTIONS
Subject to certain agreed exceptions, the Seller shall not, and shall procure that its subsidiaries and persons connected to the Seller (as defined in the SPA) shall not, for a period of five (5) years commencing from the Completion Date, either on its own account or in conjunction with, or on behalf of, any person, firm or company, conduct certain activities as agreed between the Parties (involving manufacturing and production in Malaysia of steel bars and wire rods and importation into Malaysia and purchase from importers for sale within Malaysia of the same products) ("Restricted Activities") or have any interest (as defined in the SPA) directly or indirectly in any firm, company or partnership which conducts Restricted Activities, in Malaysia.
12. GOVERNING LAW
The SPA shall be governed by, and construed in accordance with, the laws of Malaysia, and the Parties agree to submit to the exclusive jurisdiction of the Courts of Malaysia.
21
INFORMATION ON THE TARGET GROUP
APPENDIX II
1. HISTORY AND BUSINESS
AJSB was incorporated in Malaysia on 10 October 1961 as a private limited company under the name of Malayawata Steel Limited under the Companies Ordinances, 1940-1946 and is deemed registered under the Act. On 15 April 1966, it changed its name to Malayawata Steel Berhad and was converted into a public limited company on 28 April 1966. On 8 December 2006, the company changed its name to Ann Joo Steel Berhad.
AJSB commenced business in 1961 and is a major steel manufacturer in Malaysia. The company is principally involved in the business of steel mill, trading of iron, steel and steel related products, as well as investment holding. AJSB manufactures billets and rebars. The principal market of AJSB's products is in Malaysia.
As at the LPD, the Target Group owns the following steel plants:
AJSB
(i) Steel making plant (Electric Arc Furnace)
Location : Lot 1225, Lot 1227, 1236 and Lot 3041, Prai Industrial Estate, 13600, Prai, Pulau Pinang
(ii) Rolling mill
Location : Lot 1225, Lot 1227, 1236 and Lot 3041, Prai Industrial Estate, 13600, Prai, Pulau Pinang
AJIS
(i) Iron and steel making plant (Blast Furnace)
Location : Lot 1225, Lot 1227, 1236 and Lot 3041, Prai Industrial Estate, 13600, Prai, Pulau Pinang
2. SHARE CAPITAL
As at the LPD, AJSB has an issued share capital of RM744,399,686.02 comprising 612,993,535 AJSB Shares.
3. DIRECTORS
As at the LPD, the directors of AJSB are Dato' Lim Hong Thye, Dato' Lim Aun Chuan, Lim Hong Hock, Ng @ Ooi Sim Hwang and Lee Ming Chea.
4. SHAREHOLDER
As at the LPD, AJSB is a wholly-owned subsidiary of AJR.
INFORMATION ON THE TARGET GROUP (Cont'd)
APPENDIX II
5. SUBSIDIARIES AND ASSOCIATED COMPANIES
As at the LPD, the subsidiary of AJSB is as follows:
| Name of subsidiary | Date and place of incorporation | Issued share capital (RM) | Equity interest (%) | Principal activity |
|---|---|---|---|---|
| AJIS | 25 May 2007 / Malaysia | 147,000,000 | 100.0 | Manufacturing and trading of iron, steel and steel related products, general trading and investment holding |
AJIS commenced business in 2011. The company is principally involved in manufacturing and trading of iron, steel and steel related products, general trading and investment holding. The range of products manufactured by AJIS includes liquid hot metal and pig iron. The principal market of AJIS' products is in Malaysia. As at the LPD, the iron and steel making plant of AJIS has been shut down.
As at the LPD, AJSB does not have any associated companies.
6. HISTORICAL FINANCIAL INFORMATION
The summary financial information of AJSB based on its audited consolidated financial statements for the past three FYE 31 December 2023 to FYE 31 December 2025 is as follows:
| FYE 31 December | |||
|---|---|---|---|
| 2023 | 2024 | 2025 | |
| RM'000 | RM'000 | RM'000 | |
| Revenue | 1,789,309 | 1,787,503 | 1,382,358 |
| Gross loss | 156,134 | 174,614 | 105,687 |
| Loss before taxation | (219,289) | (279,854) | (218,440) |
| Loss after taxation ("LAT") | (169,558) | (280,317) | (218,446) |
| Loss per AJSB Share(1)(RM) | (0.33) | (0.46) | (0.36) |
| Share capital | 676,132 | 744,400 | 744,400 |
| Total equity / NA | 624,995 | 412,754 | 193,620 |
| Cash and cash equivalents | 44,645 | 36,795 | 11,336 |
| No. of AJSB Shares in issue ('000) | 509,558 | 612,994 | 612,994 |
| NA per AJSB Share(2) | 1.23 | 0.67 | 0.32 |
| Total borrowings | 907,375 | 862,174 | 660,335 |
| Current ratio (times)(3) | 0.75 | 0.60 | 0.35 |
| Gearing (times)(4) | 1.45 | 2.09 | 3.41 |
Notes:
(1) Computed based on LAT divided by number of AJSB Shares in issue.
(2) Computed based on NA divided by number of AJSB Shares in issue.
(3) Computed based on total current assets divided by total current liabilities.
(4) Computed based on total borrowings divided by total equity.
INFORMATION ON THE TARGET GROUP (Cont'd)
APPENDIX II
Commentary on past financial performance
FYE 31 December 2024 vs FYE 31 December 2023
Revenue decreased slightly by RM1.8 million or approximately 0.1% to RM1,787.5 million for the FYE 31 December 2024 (FYE 31 December 2023: RM1,789.3 million).
LAT increased by RM110.7 million or approximately 65.3% to RM280.3 million for the FYE 31 December 2024 (FYE 31 December 2023: RM169.6 million). The increase in LAT was mainly due to:
(a) higher administrative expenses of RM41.81 million incurred for the FYE 31 December 2024 (FYE 31 December 2023: RM24.42 million) mainly due to higher employee benefits incurred for the FYE 31 December 2024; and
(b) higher finance costs of RM43.90 million incurred for the FYE 31 December 2024 (FYE 31 December 2023: RM30.28 million) mainly due to higher bank borrowings for the FYE 31 December 2024.
FYE 31 December 2025 vs FYE 31 December 2024
Revenue decreased by RM405.1 million or approximately 22.7% to RM1,382.4 million for the FYE 31 December 2025 (FYE 31 December 2024: RM1,787.5 million). The decrease in revenue was mainly due to the lower sales volume and lower average selling price of the AJSB group's products.
Notwithstanding the decrease in revenue, LAT decreased by RM61.9 million or approximately 22.1% to RM218.4 million for the FYE 31 December 2025 (FYE 31 December 2024: RM280.3 million). The decrease in LAT was mainly due to:
(a) lower gross loss of RM105.69 million recorded for the FYE 31 December 2025 (FYE 31 December 2024: RM174.61 million) which is in line with the decrease in revenue for the FYE 31 December 2025;
(b) lower administrative expenses of RM22.07 million incurred for the FYE 31 December 2025 (FYE 31 December 2024: RM41.81 million) due to the lower employee benefits incurred for the FYE 31 December 2025; and
(c) lower finance costs of RM36.84 million incurred for the FYE 31 December 2025 (FYE 31 December 2024: RM43.90 million) due to the repayment of bank borrowings for the FYE 31 December 2025.
24