KUALA LUMPUR (June 12): Plastic packaging product maker Thong Guan Industries Bhd (KL:TGUAN) has scrapped its plan to sell its food and beverage (F&B) business to its largest shareholder, Foremost Equals Sdn Bhd (FESB).

The decision comes after both parties failed to reach an agreement on the final sale price, which exceeded the RM60 million initially proposed when the deal was announced in November last year. As a result, they have mutually agreed to terminate the sale and purchase agreement on Thursday (June 12).

“Pursuant thereto, the company will continue its operations in the F&B business segment,” RHB Investment Bank said on behalf of Thong Guan in the company's bourse filing.

Under the terms of termination, Thong Guan will refund the RM6 million deposit paid by FESB, free of interest, within 14 days of the termination agreement.

The termination is not expected to have any impact on Thong Guan's earnings, net assets, or gearing for the financial year ending Dec 31, 2025.

When the deal was first announced, Thong Guan had earmarked RM30 million from the gross proceeds for a special dividend, RM29.2 million for working capital and the remainder to cover disposal-related expenses.

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

With a 37.03% stake in Thong Guan, FESB would have been entitled to RM10.41 million of the special dividend. FESB’s shareholders include Thong Guan managing director Datuk Ang Poon Chuan and his siblings, executive directors Datuk Ang Poon Khim and Datuk Ang Poon Seong.

Shares of Thong Guan closed two sen or 1.71% lower at RM1.15 on Thursday, giving it a market capitalisation of RM469.9 million.