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Dragonfly Kindergarten Charity Event @ Berkeley Uptown
Paramount reducing exposure to education industry
KUALA LUMPUR (June 22, 2019): Earlier this week, Paramount Corp stated that it entered into a conditional share sales and purchase agreement with Character First Sdn Bhd and Two Horses for the disposal of majority stakes in three of its subsidiaries involved in pre-tertiary private education business.
The companies are reported to be Paramount Education Sdn Bhd (PESB), Paramount Education (Klang) Sdn Bhd (PEKSB) and Sri KDU Sdn Bhd.
Paramount’s kindergarten to Grade 12 (K-12) education segment is made up of Sri KDU and REAL national and international schools, REAL Kids pre-schools and Cambridge English for Life (CEFL) enrichment centres.
According to a report by The Edge Malaysia, “Two Horses will acquire 69.7% equity interest in PESB for RM134.5 million cash, 80% in PEKSB for RM21 million and 80% in Sri KDU for RM385 million”.
“It is not exiting the education sector, rather, it is choosing to retain a minority position in the business. I believe it could help add value to the purchaser by building new schools for it and allowing the new shareholders to grow its business,” Alpha Real Estate Investment Trust Managers Sdn Bhd chairman Datuk Stewart LaBrooy told the weekly.
Alpha REIT owns the buildings in Kota Damansara that house Sekolah Sri KDU and Sri KDU International School (Alpha bought the assets from Paramount in 2017 for RM165 million).
The weekly also reported that Paramount will distribute RM177 million from the proceeds to shareholders “within six months of the completion of the sales and purchase agreement (SPA) while RM150 million will be used for acquisition of landbank within 24 months of the completion of the SPA”.
The group will also “utilise RM133.65 million to partly repay its borrowings while RM57.85 million is allocated for working capital”.
“The education business is in a very tough environment. There is not much growth in K-12 with over 100 private licences issued,” a source told the weekly.
“There is also the problem of the shortage of staff, with quality teachers moving around a lot. I suspect this is why [Paramount is] selling,” he added.
Meanwhile, Ace EdVenture Education Group founder and group CEO Anne Tham told the publication that: “There are always investors out there who focus on an education portfolio. I have also been approached before.”
“When they buy a school, they have bigger plans to add more value,” she added.
Tham explained that such “investors are often on the lookout for educational institutions that have grown to a certain size”.
Ace EdVenture operates Sri Emas International School, Dwi Emas International School and a private tutoring centre with about 4,000 students.
Berkeley Uptown set to transform Klang
June 20, 2019: IN 1965, See Hoy Chan Group, founded by the late Datuk Teo Hang Sam, launched its flagship housing project in Klang, called Berkeley Garden.
Berkeley Garden was successful but it was the only project that See Hoy Chan developed in Klang as the group was focusing on developments in Petaling Jaya. See Hoy Chan is widely known for developing Damansara Uptown and the Bandar Utama township in Petaling Jaya.
After more than 50 years, Paramount Property Development Sdn Bhd, the property arm of Bursa Malaysia-listed Paramount Corp Bhd, decided to unveil Berkeley Uptown, its maiden project in Klang
For the Teo family, Berkeley Uptown is basically their second development in Klang. The first series in Phase One is set for launch at the end of this month.
THE STORY BEHIND IT
In 2011, the owner of the Fung Keong shoe factory, built in 1939 along Jalan Goh Hock Huat in Klang, called for a tender for the 11.7ha site.
Paramount submitted its bid and won.
The company later acquired 1.6ha of vacant land fronting Jalan Goh Hock Huat, bordering the Klang central business district on the west to carry out a bigger development.
“We bought the two parcels of land because we saw the opportunity. This is the last big parcel of land that is available in Klang. We believe it is time for the ‘old’ Klang to have some new modern, lifestyle accommodation.
“We are building a modern, integrated vertical city, and we think it will make Klang more vibrant with its residential and commercial offerings,” said Paramount Property chief executive officer Beh Chun Chong.
Berkeley Uptown comprises a residential precinct, a commercial precinct, a 2.12ha education precinct and a 0.81ha public park. All the components will be connected with a pedestrian link.
Anchoring the RM1.3 billion freehold project is Sri KDU International School.
The school, which will open in 2021, is one of the main highlights of Berkeley Garden, Beh told NST Property.
“Bringing Sri KDU into Klang just shows the confidence we have in the market,” he said.
Paramount Corp is the owner of the KDU Education Group which, since the 1980s, has been offering undergraduate courses.
PUTTING FACTORY PIECES TO GOOD USE
After Paramount acquired the Fung Keong shoe factory, it discovered that the plant had been constructed using large quantities of chengal and balau and other Malaysian hardwood like, merbau and kempas.
Recognising the value of the wood and its scarcity today, Paramount decided that it should be put to good use.
To determine its age, a piece of the chengal wood was sent to an expert on Malaysian forestry from Universiti Putra Malaysia, who sent it for testing at a laboratory in the United States.
What ensued was a surprising revelation ― the age of the wood was about 200 years old, making it one of the oldest chengal wood finds in Malaysia today.
Paramount put the reclaimed wood from the old factory to good use, and you can see the result at the Berkeley Uptown sales gallery.
The successful combination of old and new showcases the rustic beauty of the timber while ensuring solid soaring pillars and high ceilings. With reclaimed chengal as a unifying element, the result embraces the environment with an ecologically sustainable design.
“Paramount is glad that it is able to do its part for the environment and, at the same time, create a legacy in the form of an iconic lifestyle structure that can be enjoyed for many years to come,” said Beh.
PROJECT TO FEATURE MOSTLY RESIDENTIAL UNITS
BERKELEY Uptown will feature a minimum of 10 towers, most of them residential, and they will be developed in several phases by 2028, said Paramount Property Development Sdn Bhd chief executive officer Beh Chun Chong.
“The big part of Berkeley Garden will be residential. We are looking to build around 4,000 apartments and low-rise villas, depending on approval,” he said.
Phase 1 of Berkeley UpTown is called Uptown Residences comprising 736 units of serviced apartments spread across three towers. The units range from 551 to 1,093 sq ft.
There will also be three low-rise blocks of garden villas (42 units) measuring 1,588 sq ft, and affordable apartments.
The first launch series in Phase 1, which is targeted at the end of this month, will see 241 serviced apartment units entering the market at an average price of RM470 per sq ft (psf), and 14 villas.
“The gross selling price for the 551-sq-ft units is RM270,000. The bigger units of 859 to 1,093 sq ft are selling from RM417,000 and RM528,000, respectively. The villas are going from RM738,000. We are selling cheaper than market price as we want buyers to enjoy some upside,” he told NST Property.
Beh said the rest of the units in Phase 1 would be launched gradually this year.
Paramount is confident that Phase 1 will be fully sold out within the next few months.
“We are building a modern and vibrant live-work-and-play community. By building a vertical city, we are reducing carbon footprint and providing a more sustainable environment.”
Beh said Phase 1 would be completed by end-2022 and most residents would be able to move in by early 2023.
Paramount has also submitted its plan for Phase 2 of the project and hopes to build between 1,500 and 2,000 units.
“It is up to us to control the density. We have quite a lot of enquiries for Berkeley Uptown, especially from Klang folks. There are quite a number of people who are looking to upgrade and live in bigger apartments like our 1,093-sq-ft units and the villas. There are also young and elderly couples who want to downgrade from their current landed family home to a small apartment, so its easier to manage.
“We are adding more facilities in Berkeley Uptown so residents can enjoy complete facilities in six to eight years,” he said.
TRANSFORMING SALES GALLERY INTO A LIFESTYLE HUB
The Berkeley Uptown sales gallery with show units was developed on a 1.62ha site and opened in March.
The sales gallery has classic setting built with chengal wood, a popular and durable hardwood that gives a pleasant feeling when you walk in.
“You will find chengal wood just about everywhere. When we took over the shoe factory, we decided to make use of the wood by adding them as structures for the sales gallery,” he said.
According to Beh, the sales gallery will remain on its present site until the project is almost at its tail end of completion.
“The sales gallery is a temporary structure. Our plan is to transform it into a lifestyle village, basically an area with food and beverage outlets as well as retail, catering for the residents. The public can also come to enjoy the outlets.”
He revealed that Japanese convenience store FamilyMart would be opening soon at the sales gallery.
There will also be a space dedicated for arts and cultural activities surrounding the premises.
“We may build up the sales gallery, or what we call the village, to include two levels. If there is demand and it becomes very popular, then we will maintain the structure permanently. It will be like a clubhouse but without a swimming pool. Students from KDU International can patronise it,” said Beh.
EXPANDING BERKELEY UPTOWN?
If Paramount gets an opportunity to acquire more land nearby, the company would consider expanding Berkeley Uptown or replicate the development in Klang, said Beh.
“This is a good area. There is not much development along Jalan Goh Hock Huat and we are located right smack in the Klang town. Its close geographical proximity to Klang’s main business hub makes it a convenient and ideal place for everyday living.
“We are not sure if anyone is selling as we haven’t been looking, but if there is a good opportunity, we will look at it.”
There are a few factories and more than 100 businesses like restaurants, cafes, car showrooms and workshops operating along Jalan Goh Hock Huat.
“There is easy access to major highways. The connectivity and accessibility of Klang has been boosted by various highways like the North Klang Valley Expressway, North-South Highway, Federal Highway, Shah Alam Expressway and the South Klang Valley Expressway.
“Berkeley Uptown is also about 3km from the existing Klang KTM station, and 0.9km away from the new Light Rapid Transit (LRT) Line 3 station in Klang, allowing convenient access to Kuala Lumpur city centre. When LRT 3 is completed, it will add to the accessibility and make it convenient for those preferring to use the public transport,” added Beh.
Source: Link
Paramount to sell education biz for RM540.5m, pay RM177m special dividend
KUALA LUMPUR (June 20, 2019): Paramount Corp Bhd is to divest its controlling stake in its K-12 education business for an indicative RM540.5 million in cash, and intends to distribute RM177 million from proceeds of the sale as special cash dividend.
In a bourse filing today, the group said it was selling majority stakes in Paramount Education Sdn Bhd (PESB), Paramount Education (Klang) Sdn Bhd (PEKSB) and Sri KDU Sdn Bhd (Sri KDU) to Character First Sdn Bhd and Two Horses Capital Sdn Bhd (THC).
In particular, Paramount will be selling 69.7% or 130.34 million ordinary shares in PESB, 80% or 800,000 shares in PEKSB and 80% or 1.8 million shares in Sri KDU.
The sale is expected to result in a pro forma gain of RM487.81 million — improving earnings per share (EPS) by RM1.10, with the group distributing RM177 million of the proceeds as dividends to shareholders within six months of the agreement.
RM150 million will be used to acquire new property for its landbank within two years of the agreement; RM133.65 million will be used to repay borrowings, within six months of the agreement; RM57.85 million will be used as working capital, to be utilised within a year; and RM22 million will be for expenses associated with the sale, to be paid within three months of the agreement.
The sale is subject to approval from the Ministry of Education (MoE) and the shareholders.
Paramount’s K-12 education businesses are composed of the Sri KDU and REAL national and international schools, REAL Kids pre-schools, and Cambridge English for Life (CEFL) enrichment centres.
In a separate statement, Paramount group chief executive officer Jeffrey Chew said the move allows the group to unlock the value of its education business, and the cash raised from the sale will be used as working capital, to grow its property development business’ land bank and be distributed to shareholders in the form of dividends.
Chew noted that Paramount will still maintain a minority stake with board representation in the Sri KDU Schools and the REAL Education Group.
In addition, the move will also see Paramount’s property development and education business as stand-alone businesses, allowing for the group to grow its property development division.
He added that the group’s aim has always been to strengthen its businesses locally with regional expansion in sight.
“To do so, we believe the most efficient way is to work with a strategic partner with the experience, network and financial capacity,” said Chew.
Rothschild & Co is the sole financial advisor to the Paramount’s board for the sale. Meanwhile RHB Investment Bank Bhd is the sole principal advisor.
Credit Suisse is a buyside advisor and Malayan Banking Bhd is the co-advisor to TPG Capital Asia, which is the Asian arm for global alternative asset firm TPG.
TPG Capital will provide financing to THC, as well as strategic and operational support.
THC is helmed by TPG Capital Asia senior advisor Tunku Ali Redhauddin Tuanku Muhriz and TPG Capital Asia managing partner Ganen Sarvnanthan.
Tunku Ali was a key figure in the establishment of UK independent school Malborough College’s Malaysian campus, while also being the founding trustee and chairman for non-profit Teach for Malaysia.
Ganen, who was former Khazanah Nasional Bhd head of investments, was a key player in TPG Capital Asia’s investment in Vietnam Australian International School (VAS) in Ho Chi Minh City, Vietnam.
“We are happy to embark on this journey with Paramount, the largest K-12 education group in Malaysia. We strongly believe in both the group and industry’s growth potential in Malaysia and abroad,” said Tunku Ali in the statement.
At 10:25am, shares in Paramount rose 6.25% or 13 sen to RM2.21 — with 772,000 shares traded — giving it a market capitalisation of RM897.02 million.
Rolling out soon: CSR projects under Dasar Komuniti Negara
PUTRAJAYA (June 18, 2019): The government and the private sector is working to roll out their CSR projects that will enhance the living standards of the B40 group and in People’s Housing Projects (PPR), an initiative under the National Community Policy or Dasar Komuniti Negara (DKN).
At meetings chaired by Ministry of Housing and Local Government (KPKT) deputy secretary general Datuk Dr Mary Wong in Putrajaya today, representatives from the Ministry of Youth and Sports, Kuala Lumpur City Hall (DBKL) and the private sector comprising mainly property developers, updates were given on their existing and new collaborations with selected PPRs.
Among the CSR projects were refurbishment of common facilities, a badminton outreach programme, and a cleaning and waste segregation activity.
The companies present at the meetings today include Country Garden Pacificview Sdn Bhd, Eco World Development Group Bhd, EdgeProp.my, Gamuda Land, Henry Butcher Malaysia (Mont’Kiara) Sdn Bhd, Mah Sing Group Bhd, MKH Bhd, Nippon Paint Malaysia, OSK Property, Paramount Property, Sunsuria Bhd, and UEM Sunrise Bhd.
DKN serves as a platform for the government to collaborate with all parties, including the private sector, NGOs and individuals to help the B40 group and PPR communities by uplifting their livelihood and, in turn, transform the country into a better place, said Wong.
“The objective [of DKN] is to provide a platform for PPRs to engage themselves in healthy activities and be empowered to raise their standard of living.
“However, we don’t want [the aid provided to the B40 group and PPRs] to be a one-off thing that would become a white elephant later. I hope that there will be a continuous process which will see the PPR communities appreciate the facilities and help from us,” added Wong.
Launched in February 2019, DKN is an initiative under the National Housing Policy 2.0 to empower the B40 group and PPR communities and improve their living environment. It is formed by KPKT and supported by EdgeProp.my.
