PETALING JAYA: Paramount Corp Bhd has concluded the sale of its controlling equity interest in its pre-tertiary education business to Prestigion Education Sdn Bhd (formerly known as Two Horses Capital Sdn Bhd).
In a statement yesterday, the property developer said the amount received was RM569.2mil, that is RM28.7mil or 5.3% more than the disposal consideration of RM540.5mil.
The additional amount is attributed to Paramount’s entitlement of Locked Box Compensation less notified leakages.
Group chief executive officer Jeffrey Chew said the proceeds of the divestment will be used as earlier announced to Bursa Malaysia. "We will want to expedite the distribution of the RM177mil allocated as special dividend to our investors. An announcement will be made once the board decides on the entitlement basis and the date of distribution," he said.
The additional amount received will be used as general working capital, Chew said. Chew said Paramount would intensify its efforts and resources into growing its core business of property development which contributes 75% of the group’s revenue.
"With the RM150mil allocated for land purchase, we will continue to look for land banks suitable for development within the next five years, for either landed or integrated developments.
"Where there is synergy or greater efficiency towards reaching our goals, we will enter into partnership or joint ventures, both in Malaysia and overseas."
He said the group will continue to seek opportunities overseas following its foray in Bangkok.
"Last month, we took up a 49% equity in a Thai property development company, Navarang Charoennakorn, that would be launching a premium high-rise condominium in an up-and-coming area on the banks of Chao Phraya River in Q1 2020. This will be our first property development project outside Malaysia, and we will continue to look for opportunities overseas, as part of our diversification strategy."
He added the group will explore property-related businesses to future proof the business and for earning sustainability over the long run, including growing our co-working space business.
Pursuant to the completion of the transaction, Paramount will retain an effective 20% equity interest in the pre-tertiary education business.
The pre-tertiary institutions involved are Sri KDU Schools, R.E.A.L Schools, R.E.A.L Kids pre-schools, and Cambridge English For Life (CEFL) enrichment centres.
In accounting terms, the education business will be reported as "discontinued business" in its 2019 books. Moving forward, Paramount will recognise its share of profits from the 20% equity held.
As published: The Star
