KUALA LUMPUR (Jan 2): Paramount Corp Bhd is disposing of two parcels of industrial land in Kota Damansara to an indirect wholly-owned subsidiary of Aluminium Co of Malaysia Bhd (Alcom) for RM92.13 million.
In a filing with the stock exchange, Paramount said its wholly-owned unit Seleksi Megah Sdn Bhd is selling the two lots measuring a total of 9.4 acres to EM Hub Sdn Bhd, a property and construction firm.
Seleksi Megah had acquired the leasehold properties situated adjacent with Taman Sains Selangor for a total of RM39.93 million in 2007 and 2008.
“The proposed disposal provides an opportunity for Paramount to unlock the value of the land, and to utilise the cash proceeds to acquire new land bank that are able to generate higher returns within a shorter turnaround time, to improve cash liquidity for the group’s integrated developments and to reduce bank borrowings,” the group said.
It said RM50 million of the proceeds will be used to fund future acquisitions of land bank, while RM40.1 million is earmarked for working capital and cutting back on the group’s leverage.
Paramount said the sale consideration was arrived at on a ‘willing-buyer willing-seller’ basis, after taking into consideration the net book value of the land of RM46.46 million as at the financial year ended Dec 31, 2016 (FY16), and the valuation of RM92.1 million as appraised by Knight Frank Malaysia Sdn Bhd on Dec 20, 2017.
Based on the audited consolidated financial statements of the company for FY16, the proposed disposal will result in a proforma after tax gain on disposal of about RM33.19 million to the group.
Paramount said the proposed disposal is expected to be completed by the third quarter of this year.
Paramount’s share price closed two sen or 1.13% up at RM1.79 today, giving it a market capitalisation of RM759.49 million. — theedgemarkets.com