HG Metal Manufacturing has signed a subscription agreement to purchase 18 million Class B Preference Shares in Eden Flame at RM1 per share, totaling RM18 million (approximately $5.68 million).

Eden Flame, a Malaysian steel manufacturer, operates a plant in Pasir Gudang, Johor Bahru, with operations expected to begin by Q3 2026. The company specializes in low-carbon electric arc furnace steel production.

The facility is projected to have an annual capacity of around 500,000 metric tonnes, initially focusing on 10mm–40mm rebars—a high-demand product segment in Southeast Asia.

The total consideration of RM18 million will be paid in two tranches: RM9 million upon completion and the remaining RM9 million as call notices are issued post-completion. The subscription's closing date will be mutually agreed upon by both parties.

HG Metal stated that the acquisition will be financed through internal resources, including existing working capital and/or proceeds from prior rights issues.

The Class B Shares are non-redeemable, non-cumulative preference shares with dividend priority over Eden Flame’s ordinary shares. Convertible at a 1:1 ratio, they represent about 4.4% of Eden Flame’s post-completion enlarged share capital.

HG Metal views this investment as a strategic move to bolster its regional steel supply chain. The stake in Eden Flame is expected to secure a competitive and sustainable source of low-carbon steel.

"This upstream investment ensures a reliable supply of low-carbon steel while positioning HG Metal for future growth, particularly as demand rises in Singapore and Southeast Asia," said Xiao Xia, Executive Director and CEO of HG Metal.

HG Metal’s shares closed unchanged at 49 cents on December 10.