Thong Guan teams up with Kedah agency to develop RM200mil GDV property project

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The group announced in a Bursa Malaysia filing that the project will be developed on a 20-acre plot, without disclosing its location.

KUALA LUMPUR, 17th May 2024 – Plastic packaging manufacturer Thong Guan Industries Bhd (KL:TGUAN) is collaborating with the Kedah State Development Corporation (PKNK) to develop 221 shop and office units, with an estimated gross development value (GDV) of RM200 million.

The project will be developed on a 20-acre plot, the group announced in a filing with Bursa Malaysia, without disclosing the specific location.

Thong Guan stated that this initiative aligns with its strategic plan to diversify into property development and establish a new revenue stream.

As part of the joint venture, Thong Guan is required to pay a guaranteed minimum of RM19.75 million, which includes RM15 million in cash to be paid in six installments.

PKNK will receive six completed commercial units worth at least RM4.75 million. Beyond this entitlement, Thong Guan will retain all project proceeds, including from any unsold units, with no additional claims from PKNK.

Thong Guan stated it will have full discretion over land development, subject to obtaining necessary approvals within six months.

The company plans to finance the joint development through internal funds, bank loans, or corporate actions, aiming for project completion within five years.

Thong Guan’s shares increased by one sen, or 0.49%, closing at RM2.05, with a market valuation of RM825.84 million.

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