Developer to raise RM768mil for EWI shares and future land acquisitions

KUALA LUMPUR: Eco World Development Group Bhd has proposed to place out 591.06 million new shares or 25% of its paid-up to raise up to RM768.3mil.

The property developer said the shares would be placed out at RM1.30 a share.

Eco World said RM468mil of the proceeds would be used to part-finance its subscription for Eco World International Bhd (EWI) shares pursuant to EWI’s initial public offering.

Another RM297.68mil would be for future land acquisitions and/or land acquisitions which have been announced but are pending completion and general working capital for on-going development project with remaining RM2.7mil to defray the estimated expenses in relation to the proposed placement.

Eco World said Liew Tian Xiong, an executive director and major shareholder, had given his irrevocable undertaking to subscribe for 118.21 million placement shares.

“He has also indicated his intention to subscribe for up to an additional 118.21 million placement shares, subject to, amongst others, the availability of external financing at the point of implementation of the proposed placement by Eco World,” it said.

Sinarmas Harta Sdn Bhd, a major shareholder of Eco World, indicated its intention to subscribe for up to 212.78 million of the placement shares.

Eco World said following the undertaking, it intended to place up to 236.42 million placement shares to Liew and up to 212.78 million placement shares to Sinarmas Harta and 141.85 placement shares to key institutional investor(s) of Eco World and/ or independent third party investor(s) to be identified at a later date.

“The first tranche will comprise up to 449.21 million placement shares to be placed to Liew and Sinarmas Harta,” it said.

Eco World president and CEO Datuk Chang Khim Wah said the board was encouraged by their two major shareholders’ intention to take up a substantial portion of the shares.

“It demonstrates their commitment to support Eco World’s expansion plans as well as their faith in the group’s bright future both in Malaysia and abroad.

It will further align their interests as major shareholders with the group’s long-term growth prospects which would ultimately benefit all shareholders of Eco World,” he said.

On the international front, there has been progress on the group’s plans to subscribe for up to 30% of the shares in EWI with the Securities Commission approving its proposed initial public offering.

EWI’s three projects in London, and one in Parramatta, Australia have collectively secured cumulative sales of £712.5mil as at Jan 31, 2016.

Once the subscription is completed, Eco World will be entitled to recognise a proportionate share of EWI’s earnings, including those arising from EWI’s sales.