Paramount bullish on overseas expansion
CEO confident acquisition of stake in Eco World International will be a stepping stone for future projects outside the country
“Right now, the contribution is under 10% and that’s from our Bangkok development. But we wanted to move towards diversification outside of Malaysia.” Jeffrey Chew
KUALA LUMPUR: Paramount Corp Bhd’s five-year plan is expected to propel the property developer to greater heights as the group continues to focus on overseas expansion as one of its main goals.
According to group chief executive officer Jeffrey Chew, the latest acquisition of a 21.54% stake in Eco World International Bhd (EWI) is a large part of the plan and he is confident going forward.
Last week, Paramount announced that it bought the EWI stake via its wholly-owned subsidiary, Flexsis Sdn Bhd for a total of Rm170.61mil or at 33 sen per share, which is payable in full today.
The stake was owned by GLL EWI (HK) Ltd, a unit of Guocoland Ltd that is run by Malaysia’s second-richest man, Tan Sri Quek Leng Chan.
Upon completion, Paramount is set to become the second largest stakeholder in EWI that currently has real estate developments in the United Kingdom and Australia.
Chew noted that the group hopes to increase the contribution of its overseas projects to about 30% after the acquisition.
“Right now, the contribution is under 10% and that’s from our Bangkok development. But we wanted to move towards diversification outside of Malaysia,” he told reporters at Paramount’s media briefing held here yesterday.
According to Chew, Paramount is a little behind, since there are a number of developers, who have already ventured out of Malaysia so far, but he hopes the acquisition will bring them to the 30% contribution.
Chew also noted another key strategy of the plan is to slow down its plans in Malaysia this year.
“We’ve been running too fast and need to slow down.
“The market is also not very big and we want to become a certain size before we get going again.
“More than that, we are upping our game.
“We want to excel at being not just local developers, but with projects outside of Malaysia as well,” he added.
He also said this acquisition does not mean the group will only focus on the property market in the United Kingdom
and Australia, but rather, it will be a stepping stone for future projects.
“Should opportunities arise in other countries such as Vietnam, Paramount will not say no to them.
“We will still look to EWI and since they’re focused in the United Kingdom right now, we will be too, but it won’t stop us from being a part of other projects,” he said.
Additionally, Chew said at some juncture, he looks forward to being a part of the EWI board.
“We’ve had some informal meetings and met up for a chat. We’re in no rush to get on the board but EWI’S management knows Paramount is coming in,” he noted.
Chew also said launches for the United Kingdom projects will not take place this year, but he is hopeful about the company’s growth.
“Right now, we are only strategic partners, not on the operations side. But when we meet, we will discuss things like how many board seats are available and when to launch projects once again,” he said.
When asked why Guocoland exited a company that he finds has much potential, Chew said he could not comment on that.
“Guocoland must have their own strategies or plans in place, we do not know why they exited. They were looking for someone to buy them out, and we did.
“But for us, we have said it is a very timely and opportunistic move as far as projects are concerned,” he said.
Furthermore, Chew said from the Rm170.61mil, the potential dividends attributable to Paramount in 2024 and 2025 will amount to Rm108.57mil.
“The potential dividends attributable in its first tranche dividend for the financial year 2024 to Paramount will be about Rm31.02mil. This means after the dividend is returned, Paramount has paid roughly Rm62mil for the stake,” he further explained.
Meanwhile, on other future plans, Chew said the group had allocated Rm100mil for expansion plans in 2020 and has so far, utilised about Rm40mil to Rm50mil.
“We are also trying to explore other businesses in the digital space. We feel tech is the way forward.
“That’s why we invested in open learning, ecommerce and even financial technology. We will continue looking for promising startups that have the ability to become the next unicorn. They are out there, it is just a matter of finding them.”