Paragon Globe to Use Land Sale Proceeds to Support Growth and Strengthen Financial Position
Strategy to Optimise Landbank and Refocus on High-Growth, High-Value Development Projects
After securing nearly RM337 million from the disposals of more than 67 acres of industrial land in Johor, Paragon Globe Bhd has set a clear path to use the proceeds to support growth and strengthen the company’s financial position.
Infrastructure Works and Development Costs for Projects
In the short term, RM112.17 million will be used to finance infrastructure works and development costs for its projects in Desa Cemerlang, Nusajaya, and Danga Bay.
Reducing Debt and Saving Annual Interest
Additionally, RM57 million will be allocated to reducing debt, saving RM3.07 million in annual interest.
Sustainable Value for Shareholders
“Our focus remains on ensuring the successful completion of ongoing projects and exploring new opportunities that align with our strategic goals. These efforts will enable us to deliver sustainable value for our shareholders while contributing to Johor’s transformation into a regional economic powerhouse,” Executive Chairman Datuk Seri Edwin Tan said.
Aligning with Strategic Goals
Tan said the disposals align perfectly with Paragon Globe’s strategy to optimise its landbank and refocus on high-growth, high-value development projects. Specifically, proceeds from the land disposals will be channelled into strategic acquisitions, repayment of borrowings, and funding development projects.
Johor-Singapore Special Economic Zone (JS-SEZ) Opportunities
“This move is timely, as Johor’s growth prospects are amplified by initiatives like the JS-SEZ, positioning the state as a hub for investments in sectors like digital economy and logistics. By contributing to the digital infrastructure through transactions with BDC, we support the state’s economic vision while optimising shareholder value,” Tan said.
Near-Term Financial Position and Ongoing Projects
The influx of talent, businesses, and economic activity into Johor through the JS-SEZ is expected to increase demand for high-quality residential properties, aligning these projects with the region’s broader transformation.
Fund Allocation
Specifically, RM38 million of the proceeds will be utilised to fund the construction of Pekan Sentral Phase 3 and Detached Factories Type D2, both located in Pekan Nenas, Johor. These two projects are strategically important for PGB’s growth trajectory.
Construction Timeline
The Pekan Sentral Phase 3 comprises 48 units of shop offices, with an estimated gross development cost of RM31.79 million and construction commenced this month.
The Detached Factories Type D2 is a project of five detached factories, with an estimated gross development cost of RM32.79 million, and construction commencement is slated for April.
Long-Term Growth Strategy
By ensuring the successful completion of these projects, Paragon Globe aims to establish a strong foundation that reinforces its credibility and supports its long-term growth strategy. Beyond this, the company continues to explore strategic opportunities in high-growth areas, such as healthcare infrastructure and sectors aligned with the JS-SEZ, to diversify income streams and enhance shareholder value.
Conclusion
In conclusion, Paragon Globe’s strategy to use land sale proceeds to support growth and strengthen its financial position will enable the company to execute its ongoing projects more effectively, while maintaining a strong balance sheet and exploring new opportunities that align with its strategic goals.
Frequently Asked Questions
Q: What is Paragon Globe’s strategy for using land sale proceeds?
A: Paragon Globe’s strategy is to use the proceeds to support growth and strengthen its financial position, by financing infrastructure works and development costs for ongoing projects, reducing debt, and exploring new opportunities that align with its strategic goals.
Q: What is the allocation for infrastructure works and development costs for projects?
A: RM112.17 million will be allocated for infrastructure works and development costs for its projects in Desa Cemerlang, Nusajaya, and Danga Bay.
Q: How will Paragon Globe benefit from the JS-SEZ initiatives?
A: The company believes that the influx of talent, businesses, and economic activity into Johor through the JS-SEZ will increase demand for high-quality residential properties, aligning with the region’s broader transformation, and positioning Paragon Globe to capitalise on Johor’s evolution into a regional economic powerhouse.
Q: What are Paragon Globe’s long-term growth plans?
A: Paragon Globe continues to explore strategic opportunities in high-growth areas, such as healthcare infrastructure and sectors aligned with the JS-SEZ, to diversify income streams and enhance shareholder value.