KUALA LUMPUR (Oct 11): Shareholders of Malaysian Genomics Resource Centre Bhd (MGRC) stand to receive a special cash dividend of 22 sen per share following the  group’s proposed disposal of its entire clinical pathology services business.

MGRC plans to dispose of the business, held under Mpath Sdn Bhd, to Gribbles Pathology (Malaysia) Sdn Bhd, which is indirectly owned by Singapore-based Pathology Asia Holdings Pte Ltd.

MGRC told the stock exchange today that the proposed disposal for RM42 million provides an opportunity for the group to unlock the value of its investment in Mpath Group.

MRGC said it will net a gain of disposal of some RM21.92 million from the disposal, after accounting for estimated expenses for the exercise.

Its cost of investment in MPath Group made over the period of May 2012 to September 2019 totalled RM20.54 million.

The group said it is still deliberating on plans for the utilisation of the proceeds of the disposal, but said the board has proposed a special cash dividend of 22 sen a share on an entitlement date to be determined later.

According to the filing, MPath contributed RM27.46 million or 99% of MGRC’s revenue for the financial year ended June 30, 2019. The group’s net profit during the year was RM229,000.

Moving forward, MGRC said it intends to refocus its time and resources on growing its existing genetic screening services (GSS) and genome sequencing & analysis (GSA) businesses.

The GSS business, under the brand Dtect, screens a patient’s deoxyribonucleic acid (DNA) for genetic markers and is associated with various diseases or health conditions.

“Whilst MGRC group currently does not actively market products under its GSA business, its GSA know-how and laboratory equipment are now used in the processing of its Dtect tests, and in the design and development of new genetic tests and other clinical tests,” the group added.

Upon the disposal, MGRC's remaining revenue from its GSS and GSA businesses contributed less than 5% of MGRC’s share capital, which may trigger the affected listed corporation status pursuant to Rule 8.03A of the listing requirements.

However, the group said it intends to maintain the listing status of the group and that it may seek a waiver from being classified as a cash company under Guidance Note 2 (GN2).

Shares in MGRC closed half a sen lower today at 29 sen, for a market capitalisation of RM30.02 million.