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Neo Group to acquire stake in Hi-Q Plastic Industries
SINGAPORE-LISTED Neo Group has entered into an agreement with Hi-Q Plastic Industries Sdn Bhd to subscribe for 416,327 new shares in the Malaysia-incorporated company for some RM1.6 million (S$505,485).
Neo is subscribing for the shares at RM3.855 apiece, representing 51 per cent of the enlarged issued and paid-up capital of Hi-Q. The purchase will be funded by internal sources, Neo said.
Hi-Q is a manufacturer and supplier of plastics, resins, moulds and plastic packaging products used by businesses operating in the food industry.
For the financial year ended Dec 31, 2015, Hi-Q's profit after tax (excluding any extraordinary gain) was about RM240,000.
"The proposed subscription is in line with the group's expansion strategies and growth plans for the core businesses of the group," said Neo. "It represents a strategic advancement of the group's business into the upstream of the supply chain and provides a vertical integration that will complement and support the group's existing catering and manufacturing businesses and operations."