Posted by lanjiolang > 2018-07-04 11:23 | Report Abuse

(a) the entire purcahse consideration will be used to settle debts owing by Megasteel to its creditors. Not a single sen will go to William Cheng. It is obvious that this is not a bail out exercise. It is more like a forced selling (meaning Lion Ind is there to pick up the assets at a bargain). In this regard, I give a PASS for corporate governance.

my comment:-
This is not a bargain price at all. i would like to say it is more like a forced buying than forced selling loh.

Posted by Tom > 2018-07-04 11:30 | Report Abuse

Steel counters 在5个月前已经玩完了，大家一起散会吧....

Posted by Tom > 2018-07-04 11:33 | Report Abuse

我当时 cut gain 之后，就不再回头看 steel counters....

Posted by soojinhou > 2018-07-04 11:46 | Report Abuse

I'm against the deal. Megasteel is still running at loss of more than RM10m despite being shuttered. And cost to restarting Megastill will also be incurred. So Lionind's shareholder will end up bleeding while waiting to see if WC can turn around Megasteel. It's a poor deal for minority shareholders. Those who think so can email in to register your protest. I used this:

plwong@lion.com.my, quahlc@lion.com.my

Protest against Megasteel acquisition


Ms Wong and Ms Quah,

I’m a Lionind shareholder and I represent ____ shares. I protest vehemently against the acquisition of Megasteel, and on such unfavorable terms. I cannot imagine there is any benefit to acquire an asset that causes Lionind’s net asset per share to shrink, and still bleed money in the ten millions, in addition to start up costs which the shareholders have to bear, when the possibility of turning it around is hard to gauge, given Megasteel’s past record. This deal is not fair nor reasonable and I hope the management retracts this proposal to bail out a sister company, which clearly benefits the owner at the expense of minority shareholders. Thank you.

Posted by YiStock > 2018-07-04 11:47 | Report Abuse

Based on Item 4 of the document, total funding required for the purchase is RM 638.04 million. This deal will caused the total borrowing jump to Rm 782 mil from RM 248 mil. Lion industry itself has deficit operating cash flow of negative RM 39 mil (3 quarter ended 31 march 18) despite registering Rm 153 mil profit. The additional borrowing will likely give a much bigger burden to interest expenses.

Looks like there are more cons then pros since the industry remain very challenging. Conflict of interest is quite obvious. Although some money goes to debtors, still the owner will benefit because the debt now need to be bear by all Lion Ind's shareholder.

It seriously look like a bail out case.

Posted by valuelurker > 2018-07-04 11:48 | Report Abuse

Come on old man icon you can do better RM500+mil cash for a bankrupt co in a business that can only survive due to tariffs...if there's open bidding it'll probably go for 1 cent to the dollar

Posted by Icon8888 > 2018-07-04 11:51 | Report Abuse

Thanks guys for your feedback. By combining all your inputs, it sure will help me to make a better decision

Posted by qqq3 > 2018-07-04 11:55 | Report Abuse

I don't know why you are so interested in accounting figures when you should be interested in business sense....as follows...

Posted by goldenhorn > Jul 4, 2018 11:47 AM | Report Abuse

People read already sure run.common sense.but details whether in future will megasteel help in flat steel business really nobody knows.so better run first.how long lionind can continue to pay debts for megasteel until megasteel starts profiting.we shareholders willing to support lionind management to pay debts together?

Posted by qqq3 > 2018-07-04 11:57 | Report Abuse

its also wrong to say this is not a bail out.....

this is William Cheng getting LionInd to help pay off Megasteel debts..and perhaps director guarantees.

This is not getting good bargains from forced selling...this is forced buying from banker pressures.

Posted by JN88 > 2018-07-04 12:02 | Report Abuse

Annjoo, Masteel , Lioind, SSteel .....all steel cant pakai.....

No dividend pay/low dividend pay, borrow huge money from bank(and slow slow pay never think to improve debt), pay worker little salary, play stock, delay payment for supplier.....

In the end only the boss/director pocket got money.....big car big house.....

STEEL counter not like other company at all...

Posted by JN88 > 2018-07-04 12:04 | Report Abuse

The biggest achievement for steel company is they able to borrow huge money from Banker.....and they can kidnap banker anytime.

Posted by qqq3 > 2018-07-04 12:08 |

Post removed.Why?

Posted by JN88 > 2018-07-04 12:39 | Report Abuse

qqq3: I dont think so....look at pMETAL..... I think this is the culture of steel BOSS....

20 years ago, airline company is also same like steel , but after today no more...

depend on how the boss manage the company.

Posted by qqq3 > 2018-07-04 12:49 | Report Abuse

jn.....PM Metal is aluminium....lots of good aluminium shares in the world.....

some how, aluminium men different from steel men.

Posted by JN88 > 2018-07-04 12:53 | Report Abuse

Steel man always drink koppie together and plan to robe the bank.....

Glove man sit together drink kopi also except the comfort kill shareholder.

Semicon man also drink kopi together to growth the company..
_____________________________________________________________________________

What kind of friend you make decide how far you can go....

Posted by Jon Choivo > 2018-07-04 13:48 | Report Abuse

Very interesting perspective. I definitely never really considered this way on in such detail.

My only point to raise, is that WC is may have personally guaranteed some of the loans for megasteel. Its quite common for such covenants to be in there is the company is making losses or negative equity, and want to take loan.

Posted by Jon Choivo > 2018-07-04 13:50 | Report Abuse

JN88, qqq3.

Your analysis seems wholly based on the price movements and industry condition.

All round the world, tata steel etc also getting whacked last time.

I bet in 2007, people would be commenting, all the steel man sit together drink kopi. All the semiconductor man go fly kite.

Posted by Jon Choivo > 2018-07-04 13:52 | Report Abuse

The depreciation cost should reduce as the UEL is the same, you are correct on that.

Posted by probability > 2018-07-04 13:57 | Report Abuse

If the deal took place a year ago...thats suspicious to me.

At current market dynamics - i think its a good deal.

This is the only way steel manufacturers in Malaysia can survive.

If Lionind cant utilize iron ore it will lose its market share to those who can....

Posted by probability > 2018-07-04 14:02 | Report Abuse

Those Steel manufacturers who are utilizing HRC in Malaysia like Mycron would welcome the revival.

Posted by probability > 2018-07-04 14:06 | Report Abuse

(1) HRC steel price trend:

https://www.cmegroup.com/apps/cmegroup/widgets/productLibs/esignal-charts.html?code=HRC&title=JUN_2018_U.S._Midwest_Domestic_Hot-Rolled_Coil_Steel_%28CRU%29_Index_&type=p&venue=0&monthYear=M8&year=2018&exchangeCode=XNYM&chartMode=dynamic

(2) Iron Ore priced trend:

https://www.cmegroup.com/apps/cmegroup/widgets/productLibs/esignal-charts.html?code=TIO&title=JUN_2018_Iron_Ore_62%25_Fe%2C_CFR_China_%28TSI%29_&type=p&venue=1&monthYear=M8&year=2018&exchangeCode=XNYM

Posted by probability > 2018-07-04 14:07 | Report Abuse

Malaysian Scrap Based EAF manufacturers neither can buy Scrap Steel from China nor U.S....

Scrap Steel price would only go up.

Posted by godhand > 2018-07-04 14:08 | Report Abuse

if the asset is deteriorating, should it be wiser to give more discout on megasteel asset. cause the asset will worth lesser over time + we wouldnt even know that the management can generate operating profit from it. any wrong move will be like a double edge sword. the interest needs still needs to be serviced as the asset becomes lower

Posted by Ooi Teik Bee > 2018-07-04 14:44 |

Post removed.Why?

Posted by JN88 > 2018-07-04 14:53 | Report Abuse

I had deal with KINSTEEL and PERWAJA last time during 2007..... I still remember that time KISTEEL up to RM7.0 ....that time I was 19 year old.....after 10 year later..... this industry still the same......

The KINSTEEL and PERWAJA boss now went to political field..... but his BOSS yeasterday just masuk lokap....

Wakakakaka.....

Posted by Ooi Teik Bee > 2018-07-04 15:01 | Report Abuse

I do not think that I selected Lionind wrongly based on quarter result and net earning.
There is still strong growth in this stock.

To be fair to me, I do not know the buying of Megasteel assets without any insider information.

Blaming me to select this stock wrongly is not fair.
I also do my research, I talk facts and figures from Lionind financial report.

I cannot be right all the times, I expect to lose some.
I do not mind to lose some if I had done my homework thoroughly.

Thank you.
Ooi

Posted by SALAM > 2018-07-04 15:06 | Report Abuse

Don't trust sifus hiding behind past and historical figures..History, very often will not repeat itself........Better stay with SENSE OF SMELL...

Posted by qqq3 > 2018-07-04 15:19 | Report Abuse

Posted by Ooi Teik Bee > Jul 4, 2018 02:44 PM | Report Abuse

To be fair to me, I do not know the buying of Megasteel assets without any insider information.
==============


u also got a lot of excuses one.

too bad, its just excuses , not business sense...not even sense of smell...and why people keep throwing?

Posted by Ooi Teik Bee > 2018-07-04 15:23 |

Post removed.Why?

Posted by qqq3 > 2018-07-04 17:48 |

Post removed.Why?

Posted by qqq3 > 2018-07-04 18:16 |

Post removed.Why?

Posted by Tom > 2018-07-04 18:18 |

Post removed.Why?

Posted by Ooi Teik Bee > 2018-07-04 18:23 |

Post removed.Why?

Posted by qqq3 > 2018-07-04 18:38 |

Post removed.Why?

Posted by Tom > 2018-07-04 18:50 | Report Abuse

otb的最爱是每天叫人家追高 hot stocks 或者炒家离场之后他叫人家接 falling knife

Posted by Tom > 2018-07-04 18:50 | Report Abuse

这一点我可以100%保证他的subscribers也会认同我所说的话

Posted by probability > 2018-07-04 19:30 | Report Abuse

Search for 'Lion group Midrex experience' pdf document in google:

(i could not paste the link here)


HDRI & HBI Production Capability at LION

The new Direct Reduced Iron Plant was built at the Megasteel
Facility in Banting, Selangor, Malaysia as shown in Figure 1. The
LION plant is based on the well-proven MEGAMOD® Shaft Furnace
with a 6.65 meter inside diameter and a proprietary MIDREX®
Reformer. All production is based on the use of imported iron
oxide.

The existing site has the capability of importing 2.5 Mpy
of iron oxide and transporting the HDRI and HBI products within
the Megasteel facility

Key Benefits

The increased supply of DRI will help to reduce the dependence
on scrap as a raw material for steel making by the Group’s various
steel mills and enable the production of high quality steel.
On site use of HDRI at high discharge temperature reduces
utility and maintenance costs (e.g., electrode and refractory costs)
and thus steel production costs. As an example, for a typical case,
hot charging at 600° C lowers operating costs $5-10/t liquid steel
and enables a 20 percent productivity increase. Figure 2 shows a
hot transport vessel.

Production of HBI allows continuous operation of the MIDREX
PLANT while other site operations might not be capable of
consuming HDRI as it is produced. Also, the HBI may be exported
safely, thus adding additional flexibility to the plant operation.

Posted by probability > 2018-07-04 20:43 | Report Abuse

http://www.theedgemarkets.com/article/megasteel-has-been-suffering-losses-due-excessive-dumping-steel-products

Lion Diversified said its wholly-owned subsidiary Lion DRI Sdn Bhd had also been similarly affected as Lion DRI supplies the "ENTIRE PRODUCTION" of hot direct reduced iron (DRI) to Megasteel as feedstock for the production of HRC.

Posted by Jon Choivo > 2018-07-04 20:46 | Report Abuse

This is true. OTB's research was done well for his purpose.

======================================================================
Posted by Ooi Teik Bee > Jul 4, 2018 03:01 PM | Report Abuse

I do not think that I selected Lionind wrongly based on quarter result and net earning.
There is still strong growth in this stock.

To be fair to me, I do not know the buying of Megasteel assets without any insider information.

Blaming me to select this stock wrongly is not fair.
I also do my research, I talk facts and figures from Lionind financial report.

I cannot be right all the times, I expect to lose some.
I do not mind to lose some if I had done my homework thoroughly.

Thank you.
Ooi

Posted by probability > 2018-07-04 20:51 | Report Abuse

https://www.metalbulletin.com/Article/2213805/Lion-cuts-DRI-prices-to-Megasteel-by-19.html

June 01, 2009

Lion cuts DRI prices to Megasteel by $19

Malaysia's Lion Diversified has cut its direct reduction iron (DRI) prices by $19 per tonne as its sole off-take customer Megasteel has cut production.

Lion Diversified subsidiary Megasteel has been operating at "a reduced capacity" since November due to the "severe global economic downturn", said Lion. Lion's wholly owned subsidiary Lion DRI, which has a capacity of 1.54 million tpy, agreed in 2007 to sell all production of DRI and hot briquetted iron...

.......................................

Imagine if Megasteel, without any China dumping now could just save this 20 USD/ton now....

That itself translates to RM 80 / ton x 1.5 M tonnes HRC (say at half capacity) :

= 160 Million profit/ annum

That itself already pay back in 3 years...

Buying at PE 3 without any existing Net Margin assumption (zero) is considered cheap ma...

Posted by qqq3 > 2018-07-04 21:02 |

Post removed.Why?

Posted by probability > 2018-07-04 21:09 | Report Abuse

I tell u what i think...

Megasteel will be able to payback in 12 months.

I think it will be able to export its HRC

Posted by qqq3 > 2018-07-04 21:14 | Report Abuse

probability

over analyse, over think
share market not necessary to be like that....

share market is actually a much simpler game.

Posted by probability > 2018-07-04 21:15 | Report Abuse

If China can export HRC to U.S and Canada using Scrap based raw material.......

What so difficult for Megasteel using DRI as raw material and now with an edge over China to export to Canada?

Posted by qqq3 > 2018-07-04 21:16 | Report Abuse

I can even grant you William C may have ambitions....

but none of his long term investors are satisfied customers.

Posted by probability > 2018-07-04 21:25 | Report Abuse

2008 - 2017 was the tsunami of China dumping....

I trust that WC could not have predicted such seismic activity.

Posted by qqq3 > 2018-07-04 21:25 | Report Abuse

even this restructuring is a scam...paying 2 sen to a $1 for unsecured creditors.

and the assets land up in William C again.....and this is the best deal the bankers can get.

William C is a scammer....and share market no need to go to bed with scammers....it does not pay to go to bed with scammers.

Posted by qqq3 > 2018-07-04 21:32 |

Post removed.Why?

Posted by probability > 2018-07-04 23:25 | Report Abuse

https://www.thestar.com.my/business/business-news/2016/04/15/megasteel-cleared-of-competition-act-infringement/

Megasteel had been operating under difficult environment due to the rampant importation of steel products into the country at dumping prices.

....................................................

China cannot afford to dump HRC price here in Malaysia anymore....as their raw material costs is too high - as they need to rely 100% on Scrap Steel which are highly priced in China.

They cannot source alternative raw material for their HRC making such as DRI made by DRI plants nor Pig Iron produced by Blast Firnace as subsititutes - as both these plants (DRI and Blast Furnace) have very high pollutant emissions.

All these boils down to China blue sky policy.

Posted by qqq3 > 2018-07-04 23:33 | Report Abuse

probability

if you want to speculate on the future...and future businesses, I can off the fingers named a dozen or so better speculations than this william C and his stuffs which no self respecting fund manager will be interested.