KUALA LUMPUR (June 7): Johor-based property developer Paragon Globe Bhd (KL:PGLOBE) is acquiring a parcel of land, measuring 9.84 acres in Plentong, Johor Bahru, for RM13.5 million.

In a bourse filing, Paragon Globe said that its wholly owned subsidiary, Paragon Business Hun Sdn Bhd (PBHSB), has entered into a sale and purchase agreement with Ng Kok Kiang, Ng Kok Seng and Ng Lo Meng for the proposed acquisition.

The group plans to develop the land by constructing a detached factory, scheduled to commence in 2025 and expected to take 1.5 years to complete.

"The estimated gross development value of the proposed development is approximately RM76.13 million, with an expected gross development cost of RM55.14 million," the group said, anticipating a gross development profit of RM20.99 million.

Paragon Globe intends to finance the acquisition cost through proceeds received from a previously announced land disposal consideration on May 8. Additionally, funding for the development is expected to be financed through internally-generated funds and/or bank borrowings.

On May 8, PBHSB entered into a conditional sale and purchase agreement with Bridge Data Centres Malaysia IV Sdn Bhd to dispose of a parcel of land, measuring 47.86 acres in Plentong for RM238.3 million.

It is noteworthy that PBHSB also inked a conditional sale and purchase agreement with Semenang Realty Sdn Bhd on May 30, to acquire a piece of land, measuring 14.85 acres in Plentong for RM28.56 million.

Paragon Globe said the latest land acquisition, along with the aforementioned land acquisitions and disposals, are situated in close proximity and are contiguous to each other.

Upon completion of all land acquisitions and disposals, Paragon Globe's land bank is expected to reach 200.89 acres.

"The latest land acquisition would provide the group with opportunities to create greater economic value and increase earnings potential over the medium- to long term, as the land has promising development potential," the group said, emphasising the strategic location of the land in the central area of Johor Bahru, surrounded by various types of industrial properties.

According to its latest financial statement, Paragon Globe's cash and cash equivalents amounted to RM25.14 million, while its bank borrowings stood at approximately RM141.51 million as of March 31.

Paragon Globe is controlled by executive chairman Datuk Seri Edwin Tan Pei Seng and his brother Datuk Seri Godwin Tan Pei Poh, who also serves as the group executive director. Both hold a 51.8% stake in the group, through the private vehicle Paragon Adventure Sdn Bhd.

Prominent businessman Tan Sri Tan Hua Choon also holds a 9.82% stake in Paragon Globe. Tan, known as the "Casio King", is the first and only distributor of the brand's watches and calculators in Malaysia.

In April, Tan pleaded not guilty to cheating the Finance Ministry in regard to a contract worth RM3.966 billion to supply, maintain and manage government fleet cars. He was accused of misrepresenting information that Spanco Sdn Bhd had at least a 30% Bumiputera interest in the tender process, resulting in the company securing the contract.

Shares in Paragon Globe settled half a sen or 1.96% higher at 26 sen on Friday, giving the group a market capitalisation of RM190.39 million.