PROPERTY developer Paramount Corp Bhd (1724) said part of the proceeds from its 20 per cent stake sale in Jerneh Insurance Bhd will be used to buy land in the Klang Valley.
"Landbank is an important part of our strategic plan. We just bought 20ha in Cyberjaya, Selangor because of the location.
We buy where there is success," managing director and chief executive officer Ong Keng Siew said. Ong said it is selling its stake in Jerneh to focus on property development and education, which will continue to contribute 70:30 to its bottom line.
"It is very glamorous to diversify but to play the diversification game is not very attractive in the eyes of investors.
We have a few options for the proceeds from the stake sale and it may include giving special dividends to shareholders," Ong said.
Paramount, with three ongoing projects, has RM207 million cash in hand and 390ha.
The company is planning to launch some RM2 billion worth of properties this year and next, Ong said after the company’s shareholders meeting in Subang Jaya, Selangor yesterday.
Paramount plans to launch a 200ha mixed development project, dubbed "Banyan Hills" in Sg Petani, Kedah by the fourth quarter of this year.
Next year, it plans to start building the new KDU College campus and a mixed development on 8.7ha in Glenmarie, Shah Alam.
"We are relocating our branch campus in Section 13, Petaling Jaya to Glenmarie.
We will redevelop the 2.1ha site into a high-end residential and commercial project in the near future," Ong said.
As for the land in Cyberjaya, Paramount plans to build mid-to high-end residential properties worth RM530 million, in two phases, starting next year.
Ong also said the company will hive off its loss-making English language centre in China.
It is talking to a buyer and expects to conclude the deal by the end of this year.
Ong did not say how much it is selling the centre for. "There is a lot to do in Malaysia in education. While the sector is tough as there are many players, we position ourselves as a quality education provider. "We plan to build more campuses and international schools and are looking at the Iskandar Development Region in Johor. We want to increase our existing 8,000 student population," he said.
By : Sharen Kaur Date Published : 04 June 2010