By Cheah Chor Sooi
THE past year has indeed witnessed the dawning of a new normal with many companies leaving their core business a.k.a comfort zone to try their hands on alien ventures.
Joining the fray is property developer Paramount Corp Bhd which has taken a plunge into the financial realm.
The company today announced that its wholly owned subsidiary Magna Intelligent Sdn Bhd (MISB) is investing in a peer-to-peer (P2P) financing platform as its entry point into the fintech sector.
Towards this end, MISB has signed a conditional share subscription agreement with P2P Venture Sdn Bhd and Omegaxis Sdn Bhd for a 30% equity interest in Omegaxis at a total cash consideration of RM13.7 mil.
Omegaxis is a special purpose vehicle set up to facilitate Paramount’s proposed investment in P2P financing platforms in collaboration with P2P Venture with a 30:70 ownership structure.
Paramount’s proposed investment is in line with its five-year (2020-2024) strategic plan to identify new sources of earnings – particularly those in the digital space – after the divestment of its education business.
“The proposed investment is a related party transaction in which the executive directors of Paramount have interest but have abstained from all deliberation and voting on the matter at the board meetings of Paramount and MISB,” Paramount pointed out in a media statement..
“The proposed investment is expected to be completed by the end-2Q 2021 after receiving the relevant approvals.”
Elaborating further, Paramount said venturing into the digital space is also intended to future proof the group for long term sustainability.
In this respect, Paramount through MISB has also invested in Openlearning Ltd, an edutech listed on the Australian Securities Exchange which operates an online education platform for tertiary education institutions.
The proposed investment will also serve as strategic alliance to pave the way for other business opportunities in the digital space, including applying to Bank Negara Malaysia for a digital banking licence that Paramount is exploring.
Upon the completion of the transaction, Omegaxis will have a 63.5% equity interest in Peoplender Sdn Bhd whose subsidiary Fundaztic SG Pte Ltd has received approval from the Monetary Authority of Singapore to operate a P2P financing platform in Singapore but has yet to launch.
A recognised market operator registered with the Securities Commission (SC), Peoplender currently operates Fundaztic, an electronic P2P financing platform launched in 2017 for start-ups and micro to small and medium enterprises (MSMEs) to procure financing for their working capital.
At the close of today’s trading, Paramount was down 0.5 sen or 0.6% to 83 sen with 294,700 shares traded, thus valuing the company at RM514 mil. – April 15, 2021
As published: Focus Malaysia