Published October 3, 2008

EPF invests in Paradigm developer

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(KUALA LUMPUR) Malaysia's Employees Provident Fund (EPF), a cash-rich retirement savings fund, plans to invest almost half a billion ringgit (S$208.5 million) in a commercial project in Petaling Jaya, a deal that sees it tying up with WCT Bhd, a construction and property group, says a report in Malaysia's Business Times.

The EPF is also a substantial shareholder in WCT, holding 17.22 per cent.

The tie-up also comes as the cost of borrowing money in capital markets has risen. A weak stock market makes it difficult for companies to raise funds.

'(The deal) provides an opportunity for WCT to raise funds for the general working capital requirements of the WCT group and to finance viable property development projects that may arise in the future,' WCT said.

Under the deal, WCT will sell 30 per cent of Jelas Puri Sdn Bhd (JPSB) to the EPF for RM87.36 million cash. JPSB will also issue five-year redeemable secured loan stocks worth some RM390 million to the EPF. The loan stocks carry interest of 6 per cent a year.

The bulk of the loan stocks, or RM320 million, will be issued in the first quarter of 2011, and the rest in the fourth quarter of the same year.

JPSB is developing The Paradigm, WCT's first high-rise commercial project in Petaling Jaya. The project has a gross development cost of RM1.06 billion, and JPSB has spent some RM107 million to date.



Last year, local authorities approved a revised plan for the project. It will feature four blocks of 27- to 33-storey office buildings, one block of 15-storey office suites, one block of 20-storey office suites and a six-storey shopping complex.

However, JPSB is preparing a new application to revise plans for the shopping centre and the four blocks of 27- to 33-storey office buildings, WCT said.

Shares of WCT on Bursa Malaysia closed seven sens higher at RM2.60 on Tuesday.