Leader Steel Holdings Berhad Unveils Key Shareholder Mandates and Share Buy-Back Plans Ahead of 33rd AGM

Key Highlights for Investors

• Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions (RRPT)
• Proposed Renewal of Share Buy-Back Authority
• Potential Impact on Share Capital, Earnings, and Shareholder Value
• Details of Related Parties and Potential Conflicts of Interest
• Financial Position and Shareholding Structure Implications

1. Proposed Renewal of Shareholders’ Mandate for RRPT

Leader Steel Holdings Berhad (LSTEEL) is seeking shareholder approval at its upcoming 33rd Annual General Meeting (AGM) for the renewal of mandates to enter into Recurrent Related Party Transactions (RRPT) as well as to approve new RRPTs. These transactions are considered essential to the day-to-day operations of LSTEEL and its subsidiaries and are conducted on an arm’s length basis, ensuring terms are not more favourable to related parties than those offered to the public.

• The RRPTs cover sale, purchase, and servicing of steel products, machinery, and rental of factory premises involving significant annual transaction values (up to RM73 million for existing RRPT and RM11 million for new RRPT).
• Key related parties include Eonmetall Group subsidiaries and major shareholders such as Dato’ Goh Cheng Huat, Datin Tan Pak Say, their children, and Bischart Sdn. Bhd.
• Shareholders are reminded that interested parties will abstain from voting and will ensure persons connected to them do the same, to avoid conflicts of interest.
• Stringent internal guidelines and annual reviews by the Audit Committee are in place to ensure fairness and transparency in RRPT execution.

Details of Transactions

The RRPTs include:

• Sale, purchase, and servicing of steel products (up to RM60 million annually).
• Sale, purchase, and maintenance of machinery (up to RM9 million annually).
• Rental of a single-storey factory for approximately RM4 million per annum.
• Additional RRPTs with Golden Valley Capital Sdn. Bhd. and GL Business Advisory Sdn. Bhd., valued at RM10 million and RM1 million, respectively.

The RRPTs are fundamental to the group’s operations and their approval is considered necessary for maintaining business continuity, operational efficiency, and cost management.

Financial and Shareholder Impact

• No immediate effect on share capital or ownership structure.
• Not expected to impact net assets, earnings per share, or gearing for the financial year ending 31 December 2026.
• Outstanding amounts due by related parties are being managed, with no significant recoverability issues identified.

2. Proposed Renewal of Share Buy-Back Authority

The company is also seeking approval to renew its share buy-back mandate, allowing it to purchase up to 10% of its issued share capital (equivalent to 16,092,786 shares). As at the latest practicable date, 6,195,400 shares have already been bought back and held as treasury shares.

Key Share Buy-Back Details

• The buy-back will be funded through retained profits (RM20.5 million as at 31 December 2025) and/or external borrowings, with the Board ensuring any borrowings are manageable.
• Purchased shares may be cancelled or retained as treasury shares. Treasury shares can be resold, distributed as dividends, or transferred in accordance with the Companies Act 2016.
• Share buy-backs will only be executed if the company remains compliant with Bursa Malaysia’s public shareholding spread requirements (currently 25%).
• If implemented in full, the public shareholding spread would decrease from 52.54% to 49.30%, with the total issued shares reduced from 160,927,860 to 144,835,074.

Potential Effects and Price Sensitivity

• The share buy-back is expected to enhance earnings per share and potentially support the company’s share price by reducing supply and signalling management’s confidence in the company’s value.
• If the buy-back is executed when shares are undervalued, it may lead to capital gains for the company if treasury shares are later sold at higher prices.
• The exercise may affect liquidity and reduce cash available for future dividends or other investments.
• Directors and substantial shareholders have no direct or indirect interest in the share buy-back.

3. Important Notes for Shareholders

• The RRPTs and share buy-backs are subject to shareholder approval at the 33rd AGM, scheduled for 25 June 2026.
• Shareholders unable to attend in person are encouraged to submit proxy forms by 23 June 2026, 2:00 pm.
• Details on the AGM and the proxy process are available on the company’s website and in the Annual Report 2025.
• Directors with interests in RRPTs (Dato’ Goh Cheng Huat, Datin Tan Pak Say, and Goh Wan Jing) will abstain from voting and deliberations on related resolutions, ensuring governance and fairness.

4. Share Price Information

The company’s shares have traded between RM0.310 and RM0.495 over the past year, with the last traded price before the circular’s publication at RM0.455. The share buy-back plan may act as a price support mechanism and could be price sensitive, especially if executed when the shares are undervalued.

5. No Material Litigation or Contracts

The company confirms there is no ongoing material litigation or non-routine contracts that could impact the business or share value at this time.

Conclusion

The proposals to renew mandates for RRPTs and share buy-backs are significant for investors. They provide operational flexibility, potential value enhancement, and demonstrate management’s commitment to shareholder interests. However, investors should be aware of potential conflicts of interest in RRPTs and the dilution impact of share buy-backs on cash reserves and dividend capacity.

Shareholders are strongly encouraged to review all AGM materials and consider the implications of these proposals on their investment in Leader Steel Holdings Berhad. The outcomes of the AGM and the subsequent execution of these mandates could be price sensitive and may have a direct impact on the valuation of the company’s shares in the near term.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy, sell, or hold any securities. Investors should conduct their own due diligence and consult with licensed financial advisors before making investment decisions. The information provided is based on publicly available documents as at the date of this article and may be subject to change.

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