KUALA LUMPUR (Oct 27): Paragon Globe Bhd (KL:PGLOBE) on Tuesday received shareholders’ approval for its proposed sale of 65 acres of land in Iskandar Puteri, Johor, to a unit of Singapore-based DayOne Data Centers Ltd for RM398.11 million.
The property group said the disposal by its wholly owned subsidiary, PGB Landmark Sdn Bhd, is expected to generate an estimated net pro forma gain of RM187.43 million as it continues to selectively monetise its land bank.
A total of 24 shareholders holding 522.45 million shares voted in favour of the disposal at an extraordinary general meeting, while two shareholders holding 202 shares voted against it. The votes in favour accounted for 99.9999% of the shares voted, the group said in a bourse filing.
Paragon Globe said the disposal is expected to strengthen its financial position. Based on its audited financial statements as at March 31 and assuming the transaction is completed, net assets per share would rise to 89 sen from 64 sen, while gearing would fall to 0.68 times from 1.06 times.
The gearing reduction takes into account a proposed RM56 million repayment of bank borrowings using part of the disposal proceeds.
Of the RM398.11 million in gross proceeds, Paragon Globe said RM146 million has been earmarked for ongoing projects, including Calia Residences by PGB and Kensley Square @ Kensington Parkview. Another RM56 million will be used to partially repay bank borrowings, while RM57.1 million has been set aside for future land bank or property acquisitions.
The land, which is located in Tanjung Kupang, was originally earmarked for the first phase of an industrial development comprising 88 factory units, with an estimated gross development value of RM419.1 million.
“Instead of tying up our cash for years to build factories on this site, we decided it was smarter to accept a good offer on the land. Once completed, the disposal will allow us to put more capital into our ongoing projects, build up our rental-income assets and reduce some borrowings,” said Paragon Globe executive chairman Datuk Seri Edwin Tan Pei Seng in a statement.
“We want to keep growing, but liquidity must always come first,” said Tan, who is the group's largest shareholder via Paragon Adventure Sdn Bhd with a 56.79% indirect stake. He also holds a 0.02% direct stake in the property developer.
As at Sept 28, PGB Landmark had received RM228.91 million — representing 57.5% of the total disposal consideration — under the staged payment structure of the sale and purchase agreement.
The transaction is targeted for completion in the second half of 2027.
Shares of Paragon Globe ended one sen or 1.41% higher at 72 sen on Tuesday, valuing the group at RM537.57 million.