Kuala lumpur: Ann Joo Resources Bhd (Ann Joo) has announced plans to sell its entire equity interest in Ann Joo Steel Bhd (AJSB) to Singapore-based Green Esteel Pte Ltd. This development follows the mutual termination of an earlier agreement to sell the stake to Southern Steel Bhd.

According to BERNAMA News Agency, the proposed sale will exclude four pieces of land located in Perak and Penang, along with all buildings and structures owned by AJSB. The cash consideration from Green Esteel is yet to be finalized and will be based on an independent audit. However, Ann Joo considers RM348.73 million to be a reasonable disposal consideration, considering AJSB's financial performance and an implied price-to-book multiple of 1.89 times.

In a filing with Bursa Malaysia, Ann Joo stated that the proposed sale aligns with its strategy to exit the upstream steel business. AJSB, which produces billets and rebars, has been incurring losses since the financial year ended December 31, 2023.

Ann Joo explained that the deal would prevent further potential losses for AJSB and its wholly owned subsidiary, Ann Joo Integrated Steel Sdn Bhd. The move will allow the Ann Joo Resources group to concentrate on expanding its downstream steel business, which includes activities like steel fabrication, engineering services for automotive and electricity sectors, and construction works for the electrification industry.

Ann Joo plans to use the illustrative gross proceeds of RM348.73 million primarily for financial obligations. Specifically, RM230 million will be allocated for repaying bank borrowings, and RM118.22 million will go towards working capital within 12 months of the share disposal. The remaining RM500,000 is earmarked for expenses related to the proposed sale.

The proposed disposal is pending shareholder approval and is expected to be finalized by the second half of 2026, as stated by Ann Joo.