Posted on 12 Feb 2015
Ailing steel maker Perwaja Holdings Bhd is wooing China's Zhiyuan Investment Group Co in a bid to revive its operations.
Yesterday, Perwaja had entered into a memorandum of agreement (MoA) with Zhiyuan, for the latter to conduct a feasibility study on a proposal to invest in the steel producer.
Under the MoA, Zhiyuan is expected to propose "such business transformation model for the restructuring, revival, operation and or otherwise to transform Perwaja."
It will also recommend a plan to revive Perwaja's Kemaman plant with new equipment and facilities for production of premium metal-steel related products.
This could include the acquisition of Zhiyuan's existing premium metal-steel related operation and or its subsidiary.
Zhiyuan is expected to conduct and complete the feasibility and technical study of the Kemaman operation; and a due diligence exercise on Perwaja's financial affairs within two months from the date of the MoA.
"Zhiyuan is desirous to expand its businesses to Malaysia, and to conduct a feasibility study with a view to revive, operate and/or transform the Kemaman Plant in particular, as part of its global business expansion plan," Perwaja added.
Zhiyuan is a conglomerate investment company incorporated in the China and one of its core businesses is in alloy manufacturing.
Perwaja slipped into PN17 on Nov 26, 2013, and the company is required to submit its regularisation plan to Bursa Securities.
Perwaja said Zhiyuan's rejuvenation plan will form part of its proposed regularisation scheme.
Kinsteel Bhd, controlled by the Pheng family, pared down its stake in Perwaja to 31.25% in December 2014. Without management control, Perwaja remains as an associate company of Kinsteel.
Perwaja, climbed 40% or 3 sen to close at 10.5 sen yesterday.
