Posted on 30 Sep 2016
Bursa Malaysia has rejected the regularisation plan of steel miller Lion Corp Bhd (LCB), putting the stock at risk of being delisted come Oct 12 if the company does not appeal against it on or before the Oct 7 deadline.
LCB, which entered into Practice Note 17 (PN17) status in October 2013, said that in the event it submitted an appeal to the exchange by the deadline, the delisting on Oct 12 would be deferred, pending a decision on the appeal.
Should LCB be delisted, shareholders intending to hold their securities in the form of physical certificates could withdraw them from their central depository system accounts maintained with Bursa Depository any time after the company has been delisted, according to LCB’s filings with the exchange.
It said that upon delisting, the company would continue to exist and operate as an unlisted entity, while it moves ahead with a corporate restructuring.
“Shareholders can still be rewarded by the company’s performance, but they will be holding shares which are no longer quoted and traded on the stock exchange,” LCB said.
Apart from its PN17 status, LCB has been in the news of late, mainly linked to financially troubled Megasteel Sdn Bhd, in which the company has a 79% stake. Lion Diversified Holdings Bhd owns the remaining stake in Megasteel.
LCB had announced last October that it was in the midst of securing potential investors for its subsidiary as part of a regularisation plan, and that Megasteel would be included in the plan as it sought potential investors to invest in the Banting-based steel miller.
Megasteel, which is primarily involved in the manufacturing and sale of hot-rolled coils and cold-rolled coils, ceased operations in September, according to reports.
It had been suffering losses in the past several years due to excessive dumping of steel products by foreign millers, and was operating intermittently depending on market conditions.
In May, LCB announced that it had obtained a restraining order for Megasteel against creditors after defaulting on RM3bil worth of loans last year.
Megasteel was reported to have failed to meet its payment for the banker’s acceptance due on Sept 23, 2015 in respect of a working capital facility, triggering a cross default by virtue of the cross default provision under principal loan documents.
