News & Articles Paragon Globe sells JB land for RM238.32mil to partly fund ongoing projects
Paragon Globe sells JB land for RM238.32mil to partly fund ongoing projects
10 May 2024
Paragon Globe Bhd is strategising to bolster its liquidity and financial position by divesting a portion of its recently acquired freehold land in Plentong, Johor Bahru, for RM238.32 million.
The company acquired 104.5 acres of land for RM71.5 million in November 2023 and is now selling 47.86 acres of this land to Bridge Data Centres Malaysia IV Sdn Bhd.
The parties have officially sealed the deal with a conditional sale and purchase agreement, as disclosed by Paragon Globe in a filing with Bursa Malaysia.
The allocated proceeds from this sale include RM94.47 million for infrastructure development, RM57 million for bank loan repayments, RM26.76 million for further land acquisitions, and RM21.7 million for operational working capital.
Additionally, RM38 million is earmarked for the construction of detached factories, shop offices, and associated expenses for two projects (Pekan Sentral Phase 3 and detached factories Type D2).
The company anticipates a net pro forma gain of RM68.47 million from this transaction, poised to elevate its net assets per share to 49 sen from 40 sen.
As of end-2023, Paragon Globe's bank borrowings amounted to RM148.6 million, while its cash and bank balances stood at RM46.8 million.
Paragon Globe views this disposal as a timely opportunity to unlock and realise the land's inherent value.
The anticipated completion of the disposal is targeted for the third quarter of 2025.
"As some proceeds are earmarked for the repayment of bank borrowings, the group anticipates potential finance or interest cost savings as well as a reduction in gearing level. This in turn will alleviate the risk of indebtedness and repayment obligations, thereby improving the liquidity position of the group moving forward," the company said.
Looking ahead, Paragon Globe intends to revise its development project to maximise future profitability and positive contributions to the group.
However, the specifics of these plans are contingent upon further feasibility assessments and market studies on prevailing market conditions.
The company acquired 104.5 acres of land for RM71.5 million in November 2023 and is now selling 47.86 acres of this land to Bridge Data Centres Malaysia IV Sdn Bhd.
The parties have officially sealed the deal with a conditional sale and purchase agreement, as disclosed by Paragon Globe in a filing with Bursa Malaysia.
The allocated proceeds from this sale include RM94.47 million for infrastructure development, RM57 million for bank loan repayments, RM26.76 million for further land acquisitions, and RM21.7 million for operational working capital.
Additionally, RM38 million is earmarked for the construction of detached factories, shop offices, and associated expenses for two projects (Pekan Sentral Phase 3 and detached factories Type D2).
The company anticipates a net pro forma gain of RM68.47 million from this transaction, poised to elevate its net assets per share to 49 sen from 40 sen.
As of end-2023, Paragon Globe's bank borrowings amounted to RM148.6 million, while its cash and bank balances stood at RM46.8 million.
Paragon Globe views this disposal as a timely opportunity to unlock and realise the land's inherent value.
The anticipated completion of the disposal is targeted for the third quarter of 2025.
"As some proceeds are earmarked for the repayment of bank borrowings, the group anticipates potential finance or interest cost savings as well as a reduction in gearing level. This in turn will alleviate the risk of indebtedness and repayment obligations, thereby improving the liquidity position of the group moving forward," the company said.
Looking ahead, Paragon Globe intends to revise its development project to maximise future profitability and positive contributions to the group.
However, the specifics of these plans are contingent upon further feasibility assessments and market studies on prevailing market conditions.
Source: NST.com.my
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