KUALA LUMPUR: 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.
Executive chairman Datuk Seri Edwin Tan said that, 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.
Additionally, RM57 million will be allocated to reducing debt, saving RM3.07 million in annual interest.
“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,” Tan told SunBiz.
In December last year, Paragon Globe shareholders approved the disposals of 47.86 acres and 19.759 acres of freehold industrial land in Desa Cemerlang, Johor, to BDC for RM238.32 million and RM98.98 million, respectively.
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.
“This move is timely, as Johor’s growth prospects are amplified by initiatives like the Johor-Singapore Special Economic Zone (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.
Sharing how the disposals enhance shareholder value, Tan said, in the near term, the RM337 million inflow will bolster the company’s financial position, enabling it to execute ongoing projects more effectively while maintaining a strong balance sheet.
“Over the next few years, we will focus our resources on high gross development value residential projects, including serviced apartment projects in Danga Bay and Johor Bahru city centre and landed projects in Iskandar Puteri. While primarily residential in nature, these developments are strategically positioned in prime locations poised to benefit from the economic growth and enhanced connectivity driven by the JS-SEZ.
“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. These initiatives position Paragon Globe to capitalise on Johor’s evolution into a regional economic powerhouse, further enhancing shareholder value,” Tan said.
He added that proceeds from the land disposals are primarily allocated towards strengthening Paragon Globe’s core property development portfolio, with a clear focus on completing ongoing projects.
“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,” Tan said.
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.
“By ensuring the successful completion of these projects, we aim to establish a strong foundation that reinforces our credibility and supports our long-term growth strategy. Beyond this, 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,” Tan said.
