Chairman backs out of deal to acquire Lion Corp's debt for RM246mil

PETALING JAYA: Lion Corp Bhd chairman and managing director Tan Sri William Cheng (pic) has backed out of an offer to acquire the group’s entire debt notes for RM246mil.

Lion Corp said yesterday in a filing with the stock exchange that Cheng had issued a letter dated Jan 6 informing the lenders of his decision.

“He will be reviewing terms for a renewed offer for the proposed acquisition of the Lion Corp bonds, debts and redeemable convertible secured loan stocks (RCSLS).

“Pursuant to the withdrawal, Lion Corp had, vide a letter dated Jan 7, 2014, informed the Lion Corp lenders that the resolution set out in the circular to the Lion Corp lenders dated Dec 13, 2013 in relation to the proposed amendments is no longer applicable and will therefore be withdrawn from the meeting of Lion Corp lenders scheduled to be held on Jan 13,” it said.

Lion Corp said that except for the proposed amendments, Lion Corp would seek the lenders’ indulgence and approval for the deferment at the meetings of the lenders scheduled to be held on Jan 13.

To recap, Cheng had offered on Dec 12 to obtain the outstanding bonds/debts/RCSLS for RM246mil cash.

There was also a proposed deferment of the payment of the principal and coupon of the Lion Corp Class B(a) RCSLS, LCB Class B(b) RCSLS and LCB Class B(c) RCSLS amounting to RM85.41mil from Dec 31, 2013 to June 30, 2014.

StarBiz had reported in November that the troubled steel product manufacturer, which recently slipped into the PN17 category for financially distressed companies, was in the midst of formulating a viable regularisation plan.

Sources had said the company would look at several avenues.

This included the divestment of non-core businesses and injection of fresh capital via new strategic shareholders, be they local or foreign parties, as part of an effort to quickly exit its PN17 status.