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4,798,267,200
1,903,738,752
497
616
4,274
3,732
280,646
General Announcement
27/08/2002
Recurrent Related Party Transactions of a Revenue or Trading Nature
SOUTHERN STEEL BERHAD
Type
Announcement
Subject
Recurrent Related Party Transactions of a Revenue or Trading Nature
Contents :
1 Introduction
Pursuant to Kuala Lumpur Stock Exchange (KLSE) Practice Note 12/2001 issued in relation to Paragraphs 10.08 and 10.09 of KLSE Listing Requirements, Southern Steel Berhad (SSB or the Company) wishes to announce the recurrent related party transactions of a revenue or trading nature from August 2002 to June 2003, as set out in the table below (the Transactions).
The pricing of the Transactions is based on the prevailing market rates.
2 Information on companies
2.1 SSB
SSB was incorporated in Malaysia on 9 December 1963 and was listed on the Main Board of the KLSE on 17 December 1993. As at 19 August 2002, the authorised share capital of the Company is RM502,000,000 divided into 500,000,000 ordinary shares of RM1.00 each and 2,000,000 preference shares of RM1.00 each. The present issued and paid-up capital is RM282,353,000.
The Company is principally involved in the manufacturing and trading of billets, steel bars and wire rods while the principal activities of its subsidiaries and associated companies include investment holding, manufacturing and sale of steel products, steel wire products, steel pipes, wire mesh, wire ropes, galvanised wires and strands and prestressed concrete wires and strands.
2.2 SWIM
SWIM was incorporated in Malaysia on 8 January 1980 and is principally involved in the manufacture and sale of steel wire products. As at 19 August 2002, it has an authorised capital of RM15,000,000 divided into 15,000,000 ordinary shares of RM1.00 each of which 13,585,000 ordinary shares have been issued and fully paid up.
2.3 NatSteel Ltd (NSL)
NSL was incorporated in Singapore on 12 August 1961 and was listed on the Singapore Exchange Securities Trading Limited in 1964. As at 19 August 2002, it has an authorised capital of S$500,000,000 comprising 1,000,000 ordinary shares of S$0.50 each and US$190,000 comprising of 190,000 preference shares of US$1.00 each, of which 365,450,737 ordinary shares have been issued and fully paid-up.
The principal activities of NSL consist of manufacturing of and trading in iron and steel products and investment holding while the principal activities of NSL Group consist of the manufacturing of and trading in iron and steel products, other building products and services, lime and industrial chemicals, environment and engineering services, electronics, properties and investments.
3 Classes of related parties and nature of the Transactions
SSB or its subsidiaries
Nature of Transaction
Estimated value of purchases from August 2002 to June 2003
(RM000)
Classes of Related Parties
Interested Directors/Major Shareholders/Person(s) connected to them
SSB
Purchase of billets
57,086
NSL Group
·
NSL, a major shareholder of the Company with an equity interest of 27.03% in SSB.
·
Dr Tan Tat Wai, the Group Managing Director of SSB with a direct and an indirect interest of 7.75% through Southern Amalgamated Co Sdn Bhd (a major shareholder of SSB) and a director of NSL.
·
Ang Kong Hua, a director of SSB and NSL. He has a direct and an indirect interest in NSL.
·
Chong Wai Siak, a director of SSB and certain subsidiaries of NSL. He has a direct and an indirect interest in NSL.
·
Chang Meng, an alternate director of SSB and a director of certain subsidiaries of NSL. He has a direct interest in NSL.
SWIM
Purchase of wire rods
2,215
NSL Group
·
NSL is deemed interested through its shareholdings in SSB.
·
Dr Tan Tat Wai, a director of SWIM and NSL.
·
Chong Wai Siak, a director of SWIM and certain subsidiaries of NSL. He has a direct and an indirect interest in NSL.
·
Chang Meng, a director of SWIM and certain subsidiaries of NSL. He has a direct interest in NSL.
The Transactions are in the ordinary course of business and are on terms not more favourable to NSL Group than those generally available to the public.
3 Rationale for and benefits to the Transactions
On 14 July 2002, a transformer serving the 33KV arc furnace at the Companys Steelmaking Plant No 1 (SMP1) suffered a catastrophic failure resulting in an unavoidable and significant reduction in processing capacity for the plant. As there is no other practical source of alternative supply with this unexpected failure, the purchase of billets from NSL becomes crucial as the Companys rolling mills have to run uninterrupted to meet committed deliveries. For the same reason, the purchases of wire rods from NSL are also critical to SWIM, a wholly owned subsidiary of the Company, to meet its customers delivery deadlines since their normal supply of wire rod from SSB have also been interrupted. As we estimate that SMP1 will not be operating for a few months, these purchases are to ensure a smooth transitional period to enable the Group to fulfill its commitment to its customers.
4 Financial Effects
4.1 Share Capital and Substantial Shareholdings
The Transactions will not have any effect on the share capital and the substantial shareholdings of the Company.
4.2 Earnings
The Transactions will enable the earnings capacity of the Group not adversely affected due to the transformer failure.
4.3 Net Tangible Assets (NTA)
The Transactions will not have any impact on the NTA of SSB Group since the purchases are purchases of material in the ordinary course of business.
5 Directors and major shareholders interests
None of the Directors, major shareholders and/or persons connected with the directors and/or major shareholders of SSB have any interest, direct and indirect in the Transactions save and except for Dr Tan Tat Wai, Messrs Ang Kong Hua, Chong Wai Siak, Chang Meng, NSL and Southern Amalgamated who are deemed interested.
6 Approvals Required
Other than the shareholders approval, there are no other approvals required for the Transactions. The Company will be seeking a shareholders mandate for the Transactions at an Extraordinary General Meeting to be convened.
7 Statement by the Board of Directors
The Board, after having considered al aspects of the Transactions, is of the opinion that the Transactions are in the best interest of SSB Group.
This announcement is dated 27 August 2002.
Query Letter Contents :
Announcement Info
Company Name
SOUTHERN STEEL BERHAD
Stock Name
SSTEEL
Date Announced
27 Aug 2002
Category
General Announcement
Reference No
SS-020823-37092
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