KUALA LUMPUR (May 22): Eonmetall Group Bhd (KL:EMETALL) founder and largest shareholder Datuk Goh Cheng Huat has proposed to privatise the steel products manufacturer via a selective capital reduction and repayment (SCR) exercise at 40 sen per share.

Under the proposal, entitled shareholders holding 274.92 million shares, representing 68.71% of the steel products manufacturer’s issued shares, would receive a total capital repayment of RM109.82 million, according to a proposal letter filed with Bursa Malaysia on Friday.

Goh, 66, directly owns a 10.28% stake in Eonmetall, while his private vehicle Eonmetall Corporation holds a direct 21.01%. Goh owns a 65% interest in Eonmetall Corporation. Together, they and their persons acting in concert (PACs) collectively control about 31.38% of the company’s issued shares.

Entitled shareholders would receive a cash payment of 40 sen for each Eonmetall share held on an entitlement date to be determined later. Shares held by the non-entitled shareholders — namely the offerors and their PACs — will not be cancelled under the exercise.

Upon completion of the exercise, the offerors and their PACs are expected to own 100% of Eonmetall, resulting in the company being delisted from Bursa Malaysia. The privatisation will be funded through an advance from Goh to Eonmetall.

The offerors said they have the financial muscle to complete the SCR.

The 40 sen offer price represents a 12.68% premium to Eonmetall’s closing price of 35.5 sen on May 21, the last trading day before the proposal letter was served. It also implies premiums ranging from 14.22% to 45.88% over the stock’s five-day to one-year volume weighted average market prices.

The rationale for the privatisation outlined in the proposal letter cites low trading liquidity, the opportunity for minority holders to exit at a premium, and greater flexibility to manage and develop its business away from public market scrutiny and short-term market expectations.

Eonmetall’s board has until June 5 to decide whether to implement the proposed privatisation.

However, directors Datin Tan Pak Say, Goh Hong Kent and Goh Kee Seng — who are deemed PACs — will abstain from deliberating and voting on the proposal.

The proposal is subject to approval from the Securities Commission Malaysia, disinterested shareholders at an extraordinary general meeting (EGM) and the High Court’s confirmation of the capital reduction.

The exercise requires approval from at least 75% in value of disinterested shareholders at the EGM, and must not be opposed by more than 10% of them.

The proposal comes alongside Eonmetall’s previously announced RM273.28 million disposal of a parcel of freehold industrial land in Klang, Selangor. The offerors said the proposed SCR would not be conditional upon completion of the land disposal, and vice versa.

Eonmetall posted a net loss of RM47.3 million for the financial year ended Dec 31, 2025 (FY2025), compared to a profit of RM3.1 million previously. The loss was mainly due to impairments on receivables and assets, as well as inventory write-downs.

Revenue fell 28% to RM142.3 million, driven by weaker sales in its steel products and trading businesses.

Eonmetall shares, which were suspended from trading 35 minutes before market close on Friday, have risen 68.2% year to date.

The stock last traded at 37 sen, its highest level in 20 months, giving the group a market capitalisation of RM149.18 million.

According to AskEdge data, Eonmetall is currently trading at 0.3 times book value. The group was loss-making in its most recent financial year and therefore does not have a price-earnings ratio.