Paramount Corp suspended ahead of material announcement today

KUALA LUMPUR (Jan 11): Property developer and education service provider Paramount Corp Bhd requested for its shares to be suspended from trading today, ahead of a material announcement, it said in a filing with Bursa Malaysia yesterday.

The announcement came after The Edge weekly’s report on Monday, citing unnamed sources, saying Paramount is disposing of its education arm’s assets to a private real estate investment trust (REIT) as part of its asset-light strategy.

The business weekly also revealed that the private REIT had secured a local pension fund as its cornerstone investor.

In an email reply to the publication, Paramount chief executive officer Jeffrey Chew (pictured) confirmed that the group had found a suitable REIT for the disposal of its education assets, but did not elaborate further.

The publication also reported that the private REIT had edged out two listed REITs, one of which is AmanahRaya REIT, for Paramount’s education assets.

“Both listed REITs offered a good price for the education assets, but Paramount chose the private REIT in the end. It could partly be due to the strong cornerstone investor the private REIT has secured,” it quoted a source.

Paramount’s education business is known for its home-grown brand of schools and colleges established over the last 30 years, namely Sri KDU Schools, KDU College in Petaling Jaya, and KDU University Colleges in Shah Alam and Penang.

It is understood that Paramount will continue to manage the education business.

The group’s education segment contributes about 30% of its revenue and profit before tax, while the remaining major portion is derived from its property arm.

This article first appeared in The Edge Financial Daily, on Jan 11, 2017. Subscribe to The Edge Financial Daily here.