KUALA LUMPUR (July 10, 2019): Paramount Corp Bhd has received shareholder approval to dispose of 65% of its tertiary education ops, giving flexibility for the company to further grow its property segment.
Group chief executive officer Jeffrey Chew said he expects revenue contribution from its property segment to increase to 85% in the next five years from around 70% currently.
“Our focus on the property segment will revolve around initiatives such as landbanking, senior living and co-working spaces,” he told reporters after the company EGM today.
In spite of the current property market slowdown, Chew said Paramount Corp is maintaining its sales target of RM1bil for this year.
Paramount Corp is selling its K-12 education business for more than half a billion ringgit but will still maintain a minority stake in the three entities it is divesting. K-12 education is for children from kindergarten through the twelfth grade.
The company will receive a cash consideration of RM540.5mil for the sale of its controlling interest in three wholly owned subsidiaries – Paramount Education Sdn Bhd, Paramount Education (Klang) Sdn Bhd and Sri KDU Sdn Bhd – to Two Horses Capital Sdn Bhd.
It plans to use 32.7% of the proceeds or RM177mil – the largest portion of its intended utilisation – as a special cash dividend for its shareholders within six months of the completion of the disposal.
The group also plans to use RM150mil to replenish its land bank and RM133.66mil to repay its borrowings.
There are also options for Paramount Corp to exit the target companies in the financial year 2021, or if Two Horses exercised its rights to buy the remaining equity interests.
Following the completion of the proposed disposal, Paramount Corp will only hold 30.3% in Paramount Education and 20% each in Paramount Education (Klang) and Sri KDU.
It will also hold an effective equity interest of 20% in REAL Education Group Sdn Bhd, of which Paramount Education holds 66%. The remaining 34% is held by Character First Sdn Bhd, all of which will be disposed of entirely to Two Horses.
