KUALA LUMPUR (Nov 2): YKGI Holdings Bhd is disposing of two of its coated coil business and related assets as a going concern for RM125 million.

The disposal to NS BlueScope (Malaysia) Sdn Bhd will result in YKGI exiting from the coated coil business in Peninsular Malaysia, enabling the company to focus on its profitable downstream business in East Malaysia.

This will present the company with an opportunity to expand its downstream business to the Peninsula, as it will no longer be saddled with financial burden on its loss-making coated coil business, YKGI said in a filing today.

The proceeds of RM125 million from the disposal is expected to be utilised for the repayment of loans, it said. As at Sept 30, YKGI’s total loans stood at RM142.87 million.

Meanwhile, to rationalise the group’s financial position, YKGI is proposing to undertake a capital reduction exercise. The actual amount of issued share capital to be reduced will be determined at a later date, the filing said.

Shares of YKGI closed up 0.5 sen or 2.78% at 18.5 sen today, for a market capitalisation of RM64.88 million.