Sunday, January 13, 2013

Shareholder percentage of Lion Group

Lion Industries

William Cheng
Ø      20.14% stake in Parkson Holdings
Ø      40.61% stake in Lion Industries
Ø      28.67% stake in Lion Diversified

Lion Diversified
Ø      49.2% stake in Lion Corp

Lion Industries
Ø      14.5% in Lion Corp
Ø      72% stake in Lion Forest
Ø      24.55% stake in Parkson Holdings
Ø      20.85% stake in Lion Diversified

What’s NEXT! … dated Jan 2013

The proposed corporate restructuring at the Lion group of companies, aimed at reducing debts and streamlining the conglomerate’s diversified business interests, is a preclude to a separate reorganization ahead of the group’s planned partial divestment of its beleaguered steel business.

This is the first phase and the next move will be to put the entire steel business into a SPV to make way for a strategic investor.

But how quickly Lion pushes ahead with its corporate restructuring will depend on how tightly the government decides to regulate the import of steel products under a new plan to protect local players. Until the steel blueprint this will be a a holding pattern. Unless the group is accorded enough protection against cheap steel imports, potential suitors for its steel business will stay in the sidelines.

In early Jan 2013, Lion Corp’s flagship listed entity received the go ahead from its lenders to dispose of its entitre 25.34% stake in Lion Industries Bhd to group chairman Tan Sri William Cheng and Dynamic Horizon Holdings Ltd.

That in turn will give the Cheng family a tighter grip on the group’s yet to be completed blast furnace project. Estimated to cost rouglhy rm3.2 billion, the blast furnace is being touted as central to the revival of the Lion group’s Megasteel Sdn Bhd. Proponents of the blast furnace in Banting say it will radically cut operating costs and help improvev the quality of Megasteel’s products.

Work on the blast furnace has been disrupted by funding problems and is only 18% completed. Cheng has been courting potential investor to help revive his steel business but talks that began two years ago were derailed by the uncertainty in the domestic steel sector.

As Malaysia’s only integrated flat steel producer, Megasteel has been given protection in the form of tariffs and import restrictions on the product. But the company has been swamped by losses which it blames on the so called illegal import of flat steel.

Megasteel will continue to enjoy government protection for up to 24 months if its able to get back into a positive cash flow position by mid 2013.

Cheng appears to be betting that this target can be achieved. He and parties related to him are proposing to acquire the shares in Lion Ind.

Lion industries registered a net assets per share of rm4.40 for 2012. But its operations have been loss making since 2009.

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Please note that all data given are merely blogger's opinion. It is strongly recommended that you do your own analysis and research before investing.