KUALA LUMPUR (July 4) — Leader Steel Holdings Bhd is seeking shareholders' approval for the proposed disposal of a freehold industrial land parcel in Kapar, Klang, for RM136.56 million as part of its strategy to strengthen its financial position and support future business growth.
The proposed transaction will be undertaken by its wholly owned subsidiary, FerroNet Asia Sdn Bhd, through the sale of a vacant industrial land parcel to WG Malaysia VIII Sdn Bhd for cash consideration.
The land, located in Mukim Kapar, Klang, covers approximately 13.35 hectares and is designated for medium industrial use. The property is currently undeveloped and is charged to Hong Leong Bank Bhd under existing financing arrangements.
Sale Price Supported by Independent Valuation
Leader Steel stated that the disposal price was negotiated on a willing buyer-willing seller basis at approximately RM95 per square foot.
The agreed consideration closely matches an independent valuation of about RM137 million conducted by Savills (Malaysia) Sdn Bhd using the comparison method. The valuation was based on the land's highest and best use, taking into account its potential for data centre and information technology infrastructure developments.
Proceeds to Improve Financial Flexibility
The company plans to allocate the sale proceeds across several strategic purposes.
A significant portion will be used to repay existing borrowings, helping to reduce the group's debt level. Additional funds will be allocated for working capital, future acquisitions or investments, and transaction-related expenses, including real property gains tax.
Leader Steel also intends to reward shareholders through a proposed special dividend of approximately three sen per share.
Positive Financial Impact Expected
Based on pro forma financial estimates, the disposal is expected to generate a net gain of approximately RM11.45 million attributable to shareholders.
The transaction is also projected to strengthen the group's balance sheet by increasing net assets per share from RM2.21 to RM2.29 while significantly lowering gearing from 0.18 times to just 0.02 times after the repayment of borrowings.
These improvements are expected to provide the company with greater financial flexibility to pursue future investment opportunities.
Shareholder Approval Required
The proposed disposal is classified as a related-party transaction under Bursa Malaysia's Main Market Listing Requirements due to the involvement of certain directors, major shareholders and related parties.
An Extraordinary General Meeting (EGM) has been scheduled for 20 July 2026 at Wisma Leader Steel in Bukit Tengah, Penang, where non-interested shareholders will vote on the proposal.
Independent adviser DWA Advisory Sdn Bhd has concluded that the transaction is fair, reasonable and not detrimental to the interests of non-interested shareholders, recommending that eligible shareholders approve the proposal.
Industry Insight
The transaction highlights the increasing value of industrial land suitable for data centre and digital infrastructure developments. It also demonstrates how companies can unlock value from non-core assets, improve their capital structure and redirect financial resources towards future expansion while maintaining strong corporate governance through independent reviews and shareholder approval.
Key Takeaways
This article helped me understand how listed companies can strengthen their financial position by disposing of strategically located land assets when market conditions are favourable. I learned that independent property valuations play an important role in ensuring disposal prices are fair and reflect market value. The article also shows that proceeds from asset sales can be used to reduce debt, improve cash flow, fund future investments and reward shareholders through special dividends. Most importantly, I learned that related-party transactions must undergo independent assessment and shareholder approval to ensure transparency, fairness and protection of minority shareholders' interests.
Yao Mu Realty, based in Kuala Lumpur, Malaysia, specializes in industrial real estate for factories and land, delivering professional and efficient solutions.
Posted by Yao Mu Realty Sdn Bhd on 5 Jul 26
Malaysia