KUALA LUMPUR (April 16): Kumpulan Perangsang Selangor Bhd (KPS) says its wholly-owned subsidiary Perangsang Packaging Sdn Bhd has proposed a selective capital reduction (SCR) and repayment exercise for industrial packaging firm Century Bond Bhd, at RM1.75 per share.

In an exchange filing today, KPS said the proposed SCR allowed Century Bond's minority shareholders to monetise their investments in the company, which was taken private by Perangsang Packaging more than two years ago.

Pursuant to the proposed SCR, entitled shareholders will receive a total capital repayment of RM2.15 million, which represents a cash repayment of RM1.75 per share.

The SCR offer price was arrived at after taking into consideration the unconditional takeover offer by Perangsang Packaging in 2016, price-to-earnings ratio of approximately 22.1 times, and price-to-book ratio of approximately 1.73 times, for the financial year ended Dec 31, 2018.

"Subsequent to the takeover offer, Century Bond was delisted and withdrawn from the official list of Bursa Malaysia Securities Bhd on Jan 18, 2017, and hence, Century Bond shares are no longer traded on the Main Market of Bursa Securities.

"Accordingly, the minority shareholders of Century Bond do not have any readily available avenue to monetise their investments in Century Bond.

"As such, the proposed SCR provides an opportunity for the entitled shareholders to realise their investments, rather than continue to hold the unlisted Century Bond shares," read the filing today.

Upon successful completion of the proposed SCR, Perangsang Packaging will hold the entire issued share capital of Century Bond.

The proposed SCR will be funded through internally generated funds of Century Bond and will not have any effect on the shareholdings of the substantial shareholders of KPS.

The exercise, which is subject to regulatory and shareholders' approval, is expected to be completed by the fourth quarter of 2019.

At the noon break today, shares in KPS were down two sen or 1.39% at RM1.42, bringing the group a market capitalisation of RM763.09 million.