KUALA LUMPUR: WCT Holdings Bhd (WCTH) has proposed the establishment of Paradigm real estate investment trust (Paradigm REIT) to be listed on the Main Market of Bursa Malaysia.
It has also identified retail shopping malls to be included in the REIT, which will be disposed of by the subsidiaries and a joint venture to Paradigm REIT.
In a filing with Bursa Malaysia, WCTH said indirect wholly owned subsidiary Gemilang Waras Sdn Bhd (GWSB) will dispose of Bukit Tinggi Shopping Centre (BTSC); 70 per cent joint venture Jelas Puri Sdn Bhd (JPSB) will sell Paradigm Mall Petaling Jaya; while WCT Hartanah Jaya Sdn Bhd (WCTHJ), its indirect wholly owned subsidiary will dispose of Paradigm Mall Johor Bahru (PMJB) for a total disposal consideration of RM2.437 billion.
The exercise will be satisfied via the issuance of 1.6 billion new undivided interest in Paradigm REIT (units), assumed to be RM1.00 per unit and to be credited as fully paid-up as well as RM837 million cash.
The cash will be funded from the issuance of medium-term notes (MTNs) under an MTN programme to be established by a special-purpose vehicle.
It said Paradigm REIT will be constituted by a deed of trust.
It will be established after the receipt of the decision of the Securities Commission Malaysia (SC) on the proposals, the execution of the deed by the proposed manager and the proposed trustee and the registration and lodgment of the deed with the SC.
WCTH said an 80 per cent jointly controlled entity, Paradigm REIT Management Sdn Bhd (PRMSB) is the proposed management company of Paradigm REIT, while RHB Trustees Bhd is the proposed trustee.
Henry Butcher Malaysia (Mont Kiara) Sdn Bhd is the proposed property manager for Paradigm REIT.
Upon completion of the proposed disposals, WCTHJ will make available 560 million units under the proposed offering, representing up to 35 per cent of the total new units arising from the total issued fund size of 1.6 billion units.
The retail price of the 560 million units will be determined at a later date.
In total, it expects gross proceeds from the proposed disposals and proposed offering will be RM1.397 billion to be used for repayment of borrowings of the WCTH group save for GWSB and WCTHJ's borrowings (RM838 million), repayment of borrowings of GWSB and WCTHJ (RM533.24 million), defray estimated expenses (RM17.65 million and working capital (RM8.11 million).
"In line with the WCTH's ongoing de-gearing initiative, the proposed disposals will allow the group to monetise its investment in the subject properties.
"The proposed disposals will provide the WCTH with additional funds to pare down the group's borrowings," it noted.
Barring unforeseen circumstances and subject to all requisite approvals being obtained, the proposals are expected to be completed by the first quarter of 2025.