Mycron Steel seeks RM30m Shah Alam factory purchase from parent MIGB
Mycron Steel Bhd is seeking non-interested shareholder approval to buy a 99-year leasehold industrial property in Shah Alam for RM30 million from its major shareholder Melewar Industrial Group Bhd. The 5.33-acre site in Seksyen 15 is currently rented by Mycron's subsidiary for RM175,000 a month.
PETALING JAYA (Aug 24): Mycron Steel Bhd is seeking approval from its non-interested shareholders for its proposed RM30 million acquisition of a leasehold industrial property in Shah Alam from its major shareholder, Melewar Industrial Group Bhd (MIGB).
In a Bursa Malaysia filing on Monday (Aug 24), Mycron said its wholly-owned subsidiary Melewar Steel Tube Sdn Bhd (MST) had proposed to buy the 5.33-acre property at Lot 10, Persiaran Selangor, Seksyen 15, which MST currently leases from MIGB for its manufacturing operations. The property, held under PN 121387, Lot 10461, comprises a single-storey detached factory with a single-storey office annex and ancillary buildings with a gross floor area of about 140,403 sq ft. The 99-year lease expires on May 11, 2085.
MST currently pays RM175,000 a month, or RM2.1 million a year, to rent the property. The tenancy agreement is to be terminated upon completion of the proposed acquisition. The RM30 million consideration is RM500,000, or about 1.6%, below the RM30.5 million market value assessed by PA International Property Consultants (KL) Sdn Bhd as at June 5, 2026. The valuer adopted the cost approach as its primary valuation method and the income capitalisation approach as a cross-check.
The valuation also takes into account the property's reliance on shared facilities with adjoining Lot 10462, including access, roofing and fire-fighting facilities. The valuer estimated about RM2.96 million would be required for works to make Lot 10461 physically and operationally independent, including a new entrance, driveway bridge, guardhouse, utilities and fire-fighting installations. The amount was deducted in arriving at the valuation.
MST proposes to fund RM24 million, or 80% of the consideration, through bank borrowings. The remaining RM6 million will be paid to MIGB in 64 consecutive monthly instalments of RM93,750 each, beginning one month after full release of the purchaser’s loan. The deferred payment is interest-free, while Mycron will provide a corporate guarantee for MST’s obligations under the deferred-payment arrangement.
Independent adviser Mercury Securities Sdn Bhd estimated the acquisition's financing cost at about 5%, compared with the property's implied annual rental cost ratio of 6.9%, and viewed the acquisition as resulting in cost savings for the group. Mercury also noted that the property is within an established industrial area and accessible via major highways including the Federal Highway, KESAS Highway, LKSA Highway and Guthrie Corridor Expressway. Mycron intends to continue using the property for MST's manufacturing business rather than as an investment asset.
The acquisition is a related-party transaction because MIGB is Mycron's major shareholder, holding a 74.13% direct stake as at the latest practicable date. Interested directors and shareholders will abstain from deliberating and/or voting on the resolution, as applicable. Mercury concluded that the proposed acquisition is fair and reasonable and not detrimental to Mycron's non-interested shareholders, and recommended that they vote in favour of the resolution. The proposal is subject to conditions including approval from Mycron's non-interested shareholders, the relevant state authority and MST's existing lenders, as well as approval for the registration of a charge over the property in favour of the financing bank and any other regulatory approvals required. An extraordinary general meeting will be held on Sept 8 to consider the proposal. Barring unforeseen circumstances and subject to the necessary approvals, Mycron expects the acquisition to be completed in the fourth quarter of 2026.
