PARAMOUNT

PARAMOUNT Corporation Bhd has acquired 18.97 acres of freehold land in Bandar Cassia, Penang, for RM57.84 million to expand its landbank and drive growth in the northern region.

In a statement, the group said the land, purchased from Penang Development Corporation, is expected to yield a gross development value (GDV) of RM744 million.

It will be funded through internally generated funds and bank borrowings.

Located within 600 metres of the Utropolis Batu Kawan township, the new parcel is accessible via Jalan Tun Abdullah Ahmad Badawi and surrounded by an established community ecosystem.

“This landbank replenishment is testament to our confidence in the long-term potential of this high-growth region, and is expected to contribute positively to our long-term revenue,” said Paramount Group CEO Jeffrey Chew.

“Our track record in this region has shown how integrated developments can truly transform local economies and uplift communities. We are excited to build on this momentum with a new development in the mature township of Bandar Cassia that will serve as the next chapter in our vision for Penang,” he added.

The proposed development will feature serviced apartments, semi-detached townhouses and shop offices.

Construction is scheduled to begin in 2027 and complete by 2033. — TMR

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PARAMOUNT Corporation Bhd is proposing a restructuring of its investment in Dynamic Gates Sdn Bhd (DGSB), the special-purpose vehicle established to hold and finance three former KDU university campuses under a 2018 securitisation deal, as key agreements approach maturity in 2026.

The proposed exercise involves redeeming RM126 million worth of cumulative redeemable non-convertible preference shares (CRNCPS) issued by DGSB through the subscription of an equivalent amount of new redeemable preference shares (RPS).

In tandem, Paramount plans to extend the tenure of a RM450 million CRNCPS subscription agreement, as well as the related call and put option agreements and the master lease agreement for the properties, by seven years to match the proposed extension of DGSB’s medium-term notes (MTN) programme.

The three campus properties — UOW Malaysia KDU campuses in Glenmarie, Batu Kawan and George Town — were sold to DGSB in 2019 for RM294 million, as part of Paramount’s exit from the education business via the sale of KDU to the University of Wollongong Australia.

While Paramount divested its operational stake, it retained an economic interest in the properties through its holdings in DGSB.

Under the original structure, DGSB issued MTNs to fund the acquisition and CRNCPS to Paramount as a form of equity contribution.

Paramount also secured call and put options to buy or sell back the properties at prevailing market value, and leased the campuses back via its subsidiary Janahasil Sdn Bhd, which in turn subleased them to the UOW Malaysia operators.

The proposed RPS issuance — which requires shareholder approval — effectively resets the terms of Paramount’s equity stake in DGSB.

Unlike the CRNCPS, which entitled the company to cumulative dividends, the new RPS will only pay discretionary dividends, subject to DGSB having distributable profits and after it settles all securitisation obligations.

There will be no cash redemption of the RPS until those obligations are fulfilled.

Paramount said the proposals would allow it to preserve its rights to reacquire the campuses via the call option, or nominate a third party to do so, while providing flexibility to monetise the assets in future.

The company added that the structure also allows it to maintain exposure to the properties without committing fresh capital or impairing cash flows, as the RPS redemption is non-cash in nature.

At the same time, the lease on the campuses will be extended by seven years from July 2026, with monthly rental rates gradually increasing from RM1.35 million to RM1.43 million over the new term.

This translates into a lease yield rising from 3.55% to 3.77% based on the updated combined valuation of RM456 million for the three campuses.

The revised valuation, conducted by Jones Lang Wootton, puts the Glenmarie campus at RM281 million, Batu Kawan at RM105 million, and George Town at RM70 million.

The company will seek shareholder approval at an upcoming EGM and expects the proposals to be completed by the first quarter of 2026.

It added that the exercise is not expected to have any material impact on its earnings, net assets or gearing for the financial year ending Dec 31, 2025.

RHB Investment Bank has been appointed as principal adviser to the proposals. — TMR

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