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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.

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"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."