Paragon Globe Berhad (Paragon Globe) has announced that it’s investing in Builtech Acres Sdn Bhd (Builtech Acres). The Company signed a conditional share subscription agreement with Builtech Acres, to subscribe for 52,900,000 new ordinary shares in Builtech Acres for a cash consideration of RM52,900,000 (Proposed Subscription), paving the way for Paragon Globe to emerge with 99.06% shareholding in Builtech Acres.
Builtech Acres is currently 100% owned by Dato’ Sri Edwin Tan Pei Seng, the Group Managing Director of Paragon Globe and the Managing Director of Joland Group. As such, this transaction is a related party transaction and will be subject to shareholder approval in an extraordinary general meeting to be convened.
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 acre in total.
The first tract of land (Hospital Land), measuring approximately 7.07 acre, has been granted approval by the Ministry of Health to establish and maintain a private hospital.
Builtech Acres had earlier entered into an agreement with Selgate Healthcare Sdn Bhd (Selgate Healthcare) and Sepang Medicity Sdn Bhd on 7th November 2019 to build and operate a 121-bed private hospital for 15 years. The gross project revenue for 15 years is RM 199.65 million.
The second tract of land is located right next to the Hospital Land, measuring approximately 17.74 acre, and is available for business expansion.
Upon completion of the Proposed Subscription, Builtech Acres will become 99.06% owned subsidiary of Paragon Globe. Dato’ Sri Edwin Tan will hold 0.94% of Builtech Acres shares.
The proceed of Proposed Subscription will eventually be fully utilised for the purpose of the full redemption of Builtech Acres’ redeemable preference shares, which is held by Dato’ Sri Edwin Tan
Commenting on the investment into Builtech Acres, Gary Goh Soo Liang, Paragon Globe’s Chief Executive Officer 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).”
“The deal is significant for Paragon Globe as it is our first step of building our capabilities in 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.
Meanwhile, Dato’ Sri Edwin Tan said, “While Builtech Acres has the option to partner external parties to build Selgate Sepang Hospital, I am glad that Paragon Globe was selected for this mutually beneficial investment.”
“Paragon Globe is a long-term investment for me. I am committed to the transformation of this public company and will continue to seek out good opportunities for Paragon Globe,” he added.