The trading division of Japanese steel producer Nippon Steel has agreed to acquire a 10 percent stake in Malaysian pipe and flat rolled products manufacturer Leform Berhad, which is aimed at strengthening supply chain cooperation and supporting Leform's operational growth.
According to a statement from Leform Berhad, the Malaysian subsidiary of Nippon Steel Trading Corporation NST Trading Malaysia Sdn Bhd will subscribe for 143.1 million newly issued shares of the company. The shares will be issued at a price of RM 0.1688 per share, a price determined at a discount to the five-day volume-weighted average market price, for a total amount of RM25 million ($6.37 million). Upon completion of the transaction, the trading division of Nippon Steel will own a 10% stake in Leform through an initial public offering.
Investments aimed at strengthening supply chain and marginality
The proceeds from the transaction are expected to be used primarily for the purchase of raw materials, which will allow the group to stock products before orders, improve supply efficiency, and purchase steel materials before expected price increases to increase gross profit, according to LeformKok Thye, Managing Director of Leform Law, emphasized the strategic importance of the investment, stating that the partnership would not only strengthen the company's capital base, but could also create potential synergies that would enhance supply chain sustainability and expand market reach.
