Paragon Globe enters into hospital management with RM52.9m investment

TheEdge Fri, Dec 20, 2019 09:07pm - 4 years View Original


KUALA LUMPUR (Dec 20): Ceramic wares trader Paragon Globe Bhd is investing RM52.9 million into Builtech Acres Sdn Bhd, a company owned by its group managing director (MD), to venture into the healthcare industry.

In a filing with Bursa Malaysia today, Paragon Globe said it has entered into a conditional subscription agreement with group MD Datuk Seri Edwin Tan Pei Seng and Builtech Acres to subscribe to 52.9 million shares in the company, representing approximately 99.06% of its total issued share capital.

Tan owns 100% of Builtech Acres, and also holds a 0.023% direct stake and a 51% indirect stake in Paragon Globe.

As such, this transaction is a related party transaction and will be subject to shareholder approval at an extraordinary general meeting to be convened.

Upon completion of the proposed subscription, Builtech Acres will become a 99.06%-owned subsidiary of Paragon Globe, while Tan will be left with 0.94% shareholding in the company.

Paragon Globe noted that Builtech Acres is the holding company for Sepang Medicity Sdn Bhd and holds two parcels of adjacent vacant freehold land zoned for commercial use in Labu, Sepang, Selangor which measures approximately 24.81 acres in total.

The first tract of land, measuring approximately 7.07 acres, has been granted approval by the Ministry of Health to establish and maintain a private hospital.

Paragon Globe said that Builtech Acres had earlier entered into an agreement with Selgate Healthcare Sdn Bhd and Sepang Medicity Sdn Bhd to build and operate a 121-bed private hospital for 15 years on this land.

The gross project revenue for 15 years is RM199.65 million.

The second tract of land is located right next to the first land, measuring approximately 17.74 acres, and is available for business expansion.

Paragon Globe said the investment in Builtech Acres will provide a good opportunity for the company to ultimately transform into an integrated property developer.

"The proposed subscription is expected to enhance the Group’s future revenue and earnings. In addition, the Board believes that the proposed subscription will enhance the Group’s profile and strengthen the sustainability of its earnings," it said.

In a separate statement, Paragon Globe chief executive officer Gary Goh Soo Liang said the deal is significant for the company as it is its first step to build its capabilities in the healthcare and wellness industry.

"We will not stop at this transaction and will continue to deepen our expertise in this space while enhancing shareholder values," he said.

"Paragon Globe is excited to be offered the opportunity to invest in this project, giving the company an avenue to enter into a long-term partnership with Selgate Healthcare, a healthcare arm of Selgate Corporation and a company of Perbadanan Kemajuan Negeri Selangor (PKNS),” Goh added.

Shares of Paragon closed unchanged today at 98 sen with a market capitalisation of RM182.92 million.

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