By Syahirah Syed Jaafar
KUALA LUMPUR (Jan 29): Paramount Corporation Bhd has received the green light from shareholders, as well as the Ministry of Education, to divest its controlling stake of its K-12 education business for an indicative price of RM540.5 million.
The approvals were the final conditions to be fulfilled in relation to the deal that was entered into in June, 2019, the group said in a statement today.
Paramount is selling majority stakes in Paramount Education Sdn Bhd (PESB), Paramount Education (Klang) Sdn Bhd (PEKSB) and Sri KDU Sdn Bhd (Sri KDU) to Prestigion Education Sdn Bhd (formerly known as Two Horses Capital Sdn Bhd). Paramount will retain an effective 20% stake in the pre-tertiary education business.
With the cash in hand, the group plans to distribute RM177 million. It will also use RM150 million to acquire new land banks. Another RM133.65 million will be used to pare down borrowings, while RM57.85 million is earmarked for working capital, and another RM22 million as estimated costs for the transaction.
On a proforma basis, the gain arising from the disposal is estimated at RM487.8 million, Paramount said.
“With the divestment, Paramount will look for good land banks that we can develop in the next five years. Where there is synergy and greater efficiency, we will go into joint ventures, not just in property development but also in property-related businesses.
“We will strengthen our construction capabilities and will continue to expand our co-working spaces and services, among other things in the pipeline. Last but not least, we will be venturing into property development overseas,” Paramount Group chief executive officer Jeffrey Chew said.
Paramount’s share price closed six sen or 4.65% higher at RM1.35 today, valuing the group at RM819.02 million.
As published: https://www.theedgemarkets.com/article/paramount-gets-green-light-shareholders-ministry-sell-education-business