Paragon Globe Plans Rights Issue to Raise up to RM56 Million

Paragon Globe Berhad (Paragon Globe) has introduced a rights issue with a minimum discount of 50% to its theoretical ex-rights price to collect up to RM56 million (TERP). The net proceeds will be used to fund the building of a medical centre in Sepang, Selangor, as well as the purchase of a 31.1-acre freehold land parcel in Pulai, Johor Bahru, and general working capital.

The final entitlement basis and final issue price of the rights shares shall be determined and fixed by the Board at a later date after receipt of all relevant approvals.

Based on the five-day volume weighted average market price of Paragon Globe shares immediately preceding the price-fixing date, the Company will price its rights shares at a minimum discount of 50% to its TERP.

The Company has set its minimum subscription level at RM5 million on the back of an irrevocable undertaking by Paragon Adventure Sdn Bhd (Paragon Adventure), the investment vehicle of Dato’ Sri Edwin Tan Pei Seng, Executive Chairman of Paragon Globe, and Dato’ Sri Godwin Tan Pei Poh, the Company’s Group Executive Director. 

Commenting on the proposed rights issue, Dato’ Sri Edwin Tan, said, “We are pleased to launch this rights issue exercise, which is effectively our first fund raising since our entry into the Company in September 2017.”

“My brother, Dato’ Sri Godwin Tan and myself continue to demonstrate our commitment to the Company via our undertaking to subscribe at least RM5 million through Paragon Adventure, to ensure the success of this rights issue.” 

The proposed rights issue will be subject to shareholder approval in an extraordinary general meeting to be convened.

Explaining the rights issue mechanism, Gary Goh, Chief Executive Officer of Paragon Globe, said, “The maximum gross proceeds of up to RM56 million to be raised from the proposed rights issue has been determined and fixed upfront to provide an indication to the entitled shareholders and/ or their renouncees with respect to the maximum capital outlay required to fully subscribe for their respective entitlements under the proposed rights issue.”

“The estimated capital outlay required by an entitled shareholder and/ or their renouncees holding 1,000 Paragon Globe shares who wishes to fully subscribe for their entitlement is approximately RM300,” he added. 

Paragon Globe proposed a private placement of up to 20% of the total number of issued shares on 21st October 2020. Paragon Globe, on the other hand, has agreed not to issue any new shares through a private placement until the proposed rights issue is completed.

On 5th December 2019, Paragon Globe Properties Sdn Bhd, a wholly owned subsidiary of Paragon Globe has entered into a conditional sale and purchase agreement with Iskandar Capital Sdn Bhd, for the proposed acquisition of freehold land in Iskandar Puteri, measuring approximately 31.1 acres for RM60.96 million cash.

On 20th December 2019, the subscription of 52.9 million ordinary shares in Builtech Acres Sdn Bhd (Builtech), marked the Company’s maiden venture into the state of Sepang and also into healthcare industry. The subscription representing approximately 99.06% of the enlarged issued share capital of Builtech for a cash consideration of RM52.9 million. Builtech holds two parcels of freehold land measuring approximately 26.63 acres.