This article first appeared in The Edge Malaysia Weekly on May 25, 2026 - May 31, 2026

Last week, Ann Joo Resources Bhd (KL:ANNJOO) announced the termination of the sale of its wholly-owned subsidiary Ann Joo Steel Bhd (AJSB) to Southern Steel Bhd (KL:SSTEEL). Instead, it entered into a deal for the disposal of the same asset to Singapore-based Green Esteel Pte Ltd.

The deal structure between Ann Joo and Green Esteel is largely similar to the now aborted transaction between Ann Joo and Southern Steel, which was proposed in March. The key difference is that the buyer in the latest deal is Green Esteel.

Green Esteel is a major shareholder of Southern Steel, with a 50.1% stake. The other substantial shareholder is Hong Leong Co (Malaysia) Bhd, an entity linked to Hong Leong Group co-founder Tan Sri Quek Leng Chan.

Based on Bursa Malaysia announcements, the Hong Leong Group has dropped out of the deal to purchase AJSB, which operates an upstream steel mill in Butterworth, Penang. The plant is located close to Southern Steel’s facility in the state.

Under the proposed transaction between Ann Joo and Green Esteel, Ann Joo plans to dispose of AJSB for an indicative sum of RM348.7 million. The transaction excludes certain assets of AJSB.

Ann Joo’s rationale for the sale is that it wants to exit the capital-intensive upstream steel manufacturing business and focus instead on the downstream segment of the industry.

As for Green Esteel, whose shareholders are from China, the acquisition is likely aimed at consolidating its position in Malaysia’s steel industry, considering that it already holds a majority stake in Southern Steel.

This marks the third attempt by Ann Joo to dispose of AJSB.

Last November, the company proposed a sale-and-leaseback arrangement involving AJSB with Axis Real Estate Investment Trust (KL:AXREIT) in a RM800 million deal. The transaction was mutually terminated in March this year after Axis REIT manager Axis REIT Managers Bhd disclosed that the findings from its due diligence exercise were not reasonably satisfactory.

A day after the deal was terminated, Ann Joo entered into an agreement with Southern Steel. Now, a new deal with Green Esteel is on the table.

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