KUALA LUMPUR (June 23): Paragon Globe Bhd (KL:PGLOBE) is selling 26.42 hectares of freehold land in Iskandar Puteri, Johor to  DayOne Data Centers Malaysia III Sdn Bhd for RM398.11 million cash. The deal is expected to generate a net gain of RM189.72 million.

The sale of the land to the data centre infrastructure provider forms part of its strategy to optimise Paragon Globe's landbank through the selective monetisation of assets, said the company in a Bursa Malaysia filing on Tuesday.

The land, currently vacant and unoccupied, is located along Jalan Gelang Patah–Tanjung Kupang in Gerbang Nusajaya, within the Johor-Singapore Special Economic Zone. It is about seven kilometres from the Sultan Abu Bakar Customs, Immigration and Quarantine Complex.

Of the proceeds, RM146 million will be used to fund ongoing property development projects, said Paragon Globe. Another RM78 million will be used to fund infrastructure and related development works tied to the disposal, RM57.1 million for new landbank acquisitions, RM56 million for repayment of bank borrowings, and RM60.6 million for working capital and tax obligations.

The repayment of borrowings is expected to reduce the company's gearing ratio to 0.40 times from 0.73 times and generate annual interest savings of about RM3.17 million.

Based on pro forma calculations, the disposal would raise Paragon Globe's net assets per share to 79 sen from 54 sen, while earnings per share would increase by 25.83 sen.

The disposal is expected to be completed in the second half of 2027, the company said.

Shares in Paragon Globe closed up four sen or 4.9% to 85 sen on Tuesday, giving the company a market capitalisation of RM634.63 million. The stock has gained 46.6% over the past year.