Hiap Teck steel unit’s plan to rope in Chinese investor falls through

PETALING JAYA: Hiap Teck Venture Bhd yesterday announced that a plan to bring in Chinese steel products producer An Steel International Co Ltd (Ansteel) as a partner to revive its steel slab business under Eastern Steel Sdn Bhd has been aborted.

Instead, the company, which owns a 55% interest in Eastern Steel, said it will start production on its own.

This comes on the heels of its peer Perwaja Holdings Bhd announcing the lapse of its partnership with Chinese conglomerate Tianjin Zhiyuan Investment Group Co Ltd in February, a move to revive its manufacturing plant in Kemaman, Terengganu.

In a filing with Bursa Malaysia, Hiap Teck said the nine-month period for the parties to enter into definitive agreements was too long and the continued suspension of Eastern Steel’s operations is not in the best interest of the company.

Recall that a cooperation agreement was inked in October 2016 between Eastern Steel, Ansteel, Orient Steel Investment Pte Ltd and Chinaco Investment Pte Ltd. Under the agreement, Orient Steel (a wholly owned subsidiary of Shougang International (Singapore) Pte Ltd, which is a substantial shareholder of Hiap Teck), was to sell its 40% in Eastern Steel to Ansteel.

Ansteel, which was incorporated in Hong Kong, is involved in steel trading and investments and is a fully owned subsidiary of Angang Group Hong Kong Co Ltd.

The partnership with AnSteel was to help Eastern Steel resume its production of slabs which was suspended in October 2015. It was also aimed at increasing its production capacity to 1.5 million tonnes a year with the inclusion of the production of hotrolled coils.