Update 2 Eco World to raise over RM2b in corporate exercise, sets sales target of RM5b for next 2 years

by **Cals** Sat 26 Apr 2014, 18:18

Update 2 Eco World to raise over RM2b in corporate exercise, sets sales target of RM5b for next 2 years

Business & Markets 2014

Written by Ho Wah Foon of theedgemalaysia.com

Friday, 25 April 2014 14:46

KUALA LUMPUR (April 25): Eco World Development Group Bhd today proposed a share subscription by its major shareholder to raise RM1.37 billion, a rights issue with free warrants to raise RM788 million, and a private placement of new shares equivalent to 20% of its enlarged share base.

These series of fund raising moves are to fund several major property acquisitions which will immediately turn the company into a top property player, the company said.

In tandem with this major corporate exercise, the company has set a sales target of RM5 billion for the next two years, with FY2014 at RM2 billion and FY2015 at RM3 billion, according to its news release.

But before the share subscription and acquisitions, the company wants to carry out a one-into-two share split of its existing shares, involving the subdivision of each of the existing ordinary shares of RM1.00 each in EW Berhad into two shares of RM0.50 each in EW Berhad.

Eco World Development Group Bhd (EW), in its filing with Bursa Malaysia, said the share subscription will be taken up by Eco World Development Holdings Sdn Bhd and Sinarmas Harta Sdn Bhd for an aggregate 806,846,852 new EW Berhad shares, for total cash of RM1,371.6 million.

The proposed renounceable rights issue of new EW Berhad shares together with new free detachable warrants are to raise gross proceeds of approximately RM788.0 million.

The proposed private placement of new EW Berhad shares, representing up to 20.00% of the then existing issued and paid-up share capital of EW Berhad after the completion of the proposed share subscription and rights issue, to investors to be identified at an issue price to be announced later.

In addition, Eco World Development Group Bhd also announced it had today entered into conditional agreements to buy property firms as in the following:
(i) acquisition of Eco Macalister Development Sdn Bhd, a wholly-owned subsidiary of Eco World Development Sdn Bhd;

(ii) acquisition of Eco World Project Management Sdn Bhd, a wholly-owned subsidiary of EW Sdn Bhd;

(iii) acquisition of development rights from certain subsidiaries of EW Sdn Bhd.

Yesterday, The Edge Financial Daily reported Eco World closed at a new one-year high last Wednesday. It gained 15 sen or 2.9% to close at RM5.35.

The counter was the third biggest gainer on Bursa Malaysia, with 1.43 million shares exchanging hands.

S P Setia confirmed that Liew had exercised his put option to sell the stake to majority shareholder Permodalan Nasional Bhd (PNB). A filing with the stock exchange on April 23 revealed Liew had sold the shares to PNB.

Liew sold his last block of shares in S P Setia ahead of his April 30 exit from the company, which he co-founded in 1974. The 2.75% block was traded off-market at RM3.95 per share, RM1.03 above the closing market price of RM2.92 on Tuesday.