KUALA LUMPUR (Nov 21): Thong Guan Industries Bhd (KL:TGUAN) has proposed a seven sen per share special dividend from proceeds of the sale of its food and beverage (F&B) business to its largest shareholder Foremost Equals Sdn Bhd for RM60 million.

The plastic packaging product manufacturer inked an agreement to sell its entire equity interest in F&B product manufacturer Syarikat Thong Guan Trading Sdn Bhd (STGT) to Foremost Equals Sdn Bhd — the investment vehicle of Thong Guan's largest shareholder, the Ang family, according to its bourse filing on Thursday.

“Upon completion of the proposed disposal, Thong Guan will exit the F&B business segment while the plastic products segment is expected to continue to be the main revenue-contributing segment for the group,” it said.

Thong Guan noted that STGT — together with its 60%-owned Everprosper Food Industries Sdn Bhd and 79.2%-owned Thong Guan Trading (Thailand) Co Ltd — contributed around 4% to 5.24% of Thong Guan’s revenue and 3.3% to 6.7% of its net profit for the past three financial years.

From the RM60 million proceeds, Thong Guan earmarked RM30 million for a special dividend, RM29.2 million for working capital and the remainder for the disposal’s expenses.

Based on the group’s share base of 401.64 million shares, the proposed special dividend would equate to seven sen per share.

Foremost Equals, with its 37.03% stake in Thong Guan, would be entitled to RM10.41 million of the proposed special dividend payout. Foremost Equals’ shareholders include Thong Guan managing director Datuk Ang Poon Chuan, and his siblings executive directors Datuk Ang Poon Khim and Datuk Ang Poon Seong.

The sale is expected to be completed by the first quarter of 2025, barring unforeseen circumstances.

Due to the deal’s related-party nature, MainStreet Advisers Sdn Bhd has been appointed as the independent adviser to Thong Guan, to advise non-interested directors and non-interested shareholders on the disposal.

Thong Guan noted the RM60 million disposal sum is within the fair market value of RM58.17 million to RM66.48 million appraised by independent business valuer FHMH Corporate Advisory Sdn Bhd based on a relative valuation approach.

Shares in Thong Guan ended unchanged at RM1.52, valuing the group at RM614.76 million.