Mystery surrounds buyer of Lion Corp’s hot-rolled plate mill

Very little is known about the mysterious buyer of the hot-rolled plate mill that Malaysia-based Lion Corp said it was selling last week.

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A check with several market participants in the country this week shed little light on Maximum Protection Services Sdn Bhd (MPS).

The only thing known about the company is that it was registered in Malaysia only a few months ago.

MPS was incorporated on April 11 2013 as a private limited liability company, with a paid-up capital of 500,000 ringgit ($152,500), according to Lion Corp’s September 3 filing to Bursa Malaysia, the country’s stock exchange, to announce the sale.

Its directors were listed as Wong Teck Siong, the largest shareholder with a 98% stake; Low Kok Sing; and Wong Kai Long, who each owns 1% interest.

When asked what type of business MPS engages in, Lion Corp said it was unable to provide any more information other than what had been announced.

Lion Corp, which also owns debt-laden flat steel producer Megasteel, said at the end of August that it was actively looking for buyers for its assets and companies under a proposed divestment programme to pay off its debts.

The sale of its hot-rolled plate mill was the first to emerge since that announcement.

Under the deal, Lion Corp will sell its 100% stake in Lion Plate Mills (LPM) to MPS for a cash consideration of 33 million ringgit ($10 million).

At the point of sale, LPM will only own fixed assets and near-zero net current assets, Lion Corp said.

LPM owns an 8.3-hectare piece of land in the Malaysian state of Terengganu with a lease that expires on May 14 2055. A three-storey office building was erected on the land 16 years ago together with a 170,000-tpy hot-rolled plate manufacturing plant, according to the filing.

Lion Corp said it was selling LPM because it had been making losses since the financial year ended 2012. LPM had been unable to maintain its market share as a result of a heavy influx of imported plate into the domestic market.

Furthermore, the increase in the prices for raw materials – which constitute a substantial portion of LPM’s cost of production – eroded its competitiveness, it added.

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