Nanyang Siang Pau - Paramount & Tropicana shareholders
Eastern & Oriental’s (E&O) additional shares proposal passed successfully. Majority shareholders agreed on subscription, for those who do not accept did not prevent it either as they had been considered carefully to subscribe additional shares.
Paramount dividend at 30 cent
One of the property developers in this week is the major shareholder of E&O, Paramount Corp. Bhd. Paramount agreed on the subscription rights on E&O, on the other hand it is actively sold off its investment in education. The group had sold off three of KDU schools at RM 38.5mil, three of the secondary schools at Penang Selangor at RM 420mil that include RM 294mil in cash and preferred shares of special purpose companies. Upon completion of the disposal, it will greatly improve the company financial condition. In this week, Paramount Property will also have another major sold off. This plan includes disposal of education investment in K-12 education and REAL Education Group Sdn Bhd at RM 540mil in cash. Following the completion of the disposal, Paramount will only hold 20%-30% of shares. Paramount is slowly monetizing its assets in the education business and entrenching itself in the property sector, in line with its strategic plan of becoming a pure-play property group. The disposal activity that includes using 32.7% of the proceeds or RM 77mil – the largest portion of its intended utilization – as a special cash dividend gave a huge surprise to all shareholders in this quiet market. After completing this disposal, the company's debt ratio also fell from 0.89 times to 0.53 times, which can cope with the impact of the future recession.
Tropicana Corp. Bhd. minor shareholder
On the same day, Tropicana Corp. Bhd. (TROP) will call for shareholders meeting to propose the disposal of Tropicana Sanctuary’s 50.1% at RM 49mil. On the other hand, they also suggested acquiring more properties totaling RM 537mil to resolve debts issue with other major shareholders. As the disposal involve major shareholder Tan Sri Danny Tan Chee Sing, thus it is belongs to related party transactions. Overall, this major shareholder’s land disposal and loan restructuring will gain more than RM 1bil cash and preferred shares. While the minor shareholders yet to receive any penny, but they saw a sharp fall in equity. In the economically grim moment, majority are issued on preferred shares, thus it’s a matter of opinion if it’s necessary for Tropicana Corp. Bhd. to increase its land. Regardless of cash or preferred shares, it certainly helps the major shareholder to realize the disposal of huge land and it helps him to increase his Tropicana Crop Bhd’s equity. As major shareholder determine to attain it despite minor shareholders are greatly unsatisfied with it. Both are property developers, one is cash out RM 1bil while the other is pull out RM 1bil, tactics are greatly different!
