KUALA LUMPUR (Jan 7): Lion Industries Corp Bhd is divesting its entire 50% stake in Singapore-based Angkasa Amsteel Pte Ltd to a South Korean steel manufacturer for S$26.65 million (RM80.9 million) to raise funds for its flat steel business venture.

In an exchange filing today, Lion Industries said it has signed a conditional sale and purchase agreement with Daehan Steel Co Ltd for the proposed disposal, which is expected to be completed by the first quarter of this year if its shareholders approve the deal.

AAPL is involved in the business of steel trading and fabrication, and the trading of other building materials. The company reported a net profit of S$4.59 million, or approximately RM13.93 million, in its financial year ended June 30, 2018.

Lion Industries purchased the 50% stake in 2011 and 2012 for RM38.05 million in total. The remaining 50% is held by LTC Corp Ltd.

The group said the proposed disposal, which allows it to dispose of its non-core assets, is not expected to result in any gain or loss to the group.

The proceeds of the disposal, it said, will be used for its expansion into the flat steel business, which will require approximately RM636 million.

The amount is to finance the proposed acquisitions of flat steel assets with a production capacity of up to 3.2 million tonnes per annum of hot rolled coils and up to 700,000 tonnes per annum of cold rolled coils, it added.

The group first announced its plans to expand into flat steel manufacturing in July 2018, when it proposed to acquire flat steel assets including a manufacturing plant in Banting, Selangor from Megasteel Sdn Bhd for RM537.73 million.

Lion Industries’ shares finished 3.5 sen or 6.7% up at 56 sen today, giving it a market capitalisation of RM381.26 million