KUALA LUMPUR (Jan 11): Leader Steel Holdings Bhd’s shares opened 11.5% higher on Thursday morning, following news that the steel and metal product maker had accepted a notice of award and offer for compensation from the Klang Land Office, invoking a compulsory acquisition for a RM42.56 million piece of land in Klang, Selangor.

Leader Steel opened to hit its intra-day high of 53.5 sen, its highest since the 52 sen recorded on Nov 17, 2023.

At 11.41am, the counter pared some of its earlier gains to trade at 51.5 sen, still up 3.5 sen or 7.29%, with 709,600 shares done. Its market capitalisation stood at RM82.57 million.

On Wednesday (Jan 10), Leader Steel announced that its wholly owned subsidiary Ferronet Asia Sdn Bhd had accepted a notice of award and offer for compensation from the Klang Land Office.

This formalises a compulsory acquisition under the Land Acquisition Act 1960 (Act 486), through which Leader Steel will dispose of the 28,903 sq m piece of land in Mukim Kapar, Klang to the Klang Land Office for RM42.56 million cash. Leader Steel is expected to see a gain of RM36.12 million from the compulsory disposal, which is estimated to be completed in the first quarter of 2024.

“In view of the said affected land being currently charged to a financial institution, the compensation consideration is subject to the amount payable to the financial institution to pare down the loan, which is in line with the charge documents. The remaining balance is expected to be used for future business expansion, working capital and the repayment of debts,” it said.

Leader Steel added that the compensation consideration of RM42.56 million included compensation for severance damages and loss of income.

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Leader Steel unit accepts compensation of over RM42m for Klang land