Tan Sri Liew Kee Sin KUALA LUMPUR (April 29): Two major shareholders of Eco World Development Group Bhd (EcoWorld) — Liew Tian Xiong and Sinarmas Harta Sdn Bhd — will collectively pump RM583.98 million at least, into the property group through a private placement exercise.

The fresh fund raised from the proposed new share placement will be used for the subscription for EcoWorld International Bhd’s (EWI) initial public offering (IPO) — in which Tan Sri Liew Kee Sin (pictured) is the executive vice-chairman. Tian Xiong is the son of Kee Sin.

EcoWorld announced to Bursa Malaysia yesterday that it is proposing a private placement involving the issuance of up to 591.07 million shares, which is equivalent to 25% of its existing paid-up capital, to raise as much as RM768.39 million, based on an indicative issue price of RM1.30 a share.

It said some RM468 million or 60.9% of the fresh capital raised will be set aside to subscribe for the IPO of EWI, which involves the issuance of up to 2.153 billion new shares plus a bonus issue of warrants after the listing.

EWI, founded by Kee Sin, mainly undertakes property projects in the United Kingdom and Australia.

The largest shareholder Sinarmas Harta and Tian Xiong held 32.02% and 11.27% stakes respectively as at Jan 21.

EcoWorld said Tian Xiong had given his undertaking to subscribe for up to 118.21 million or 40% of the new shares being placed out, subject to the availability of external financing at the point of implementation of the placement.

Meanwhile, Sinarmas Harta, a wholly-owned subsidiary of Syabas Tropikal Sdn Bhd, which in turn is 99.99% owned by EcoWorld’s non-independent non-executive deputy chairman Datuk Leong Kok Wah, also intends to subscribe to 212.78 million or 36% of the new share placement, according to the announcement.

For the remaining 141.86 million or 24% of the placement shares, EcoWorld said they will be placed to key institutional investor(s) or independent third-party investor(s) to be identified at a later stage.

In the event that the 24% shares are not fully taken up by third-party investors, EcoWorld said Tian Xiong will be keen on subscribing for an additional 118.21 million shares.

“The placement will be implemented in tranches. The board, excluding interested directors, has fixed the issue price of the first tranche of the placement shares, amounting to 449.21 million shares, at RM1.30 apiece, representing a 0.76% discount to its five-day volume weighted average market price up to April 21,” said the announcement.

Aside from funding the IPO share subscription, EcoWorld also allocated about RM297.69 million or 38.7% for future land acquisitions, ongoing land acquisitions and general working capital for ongoing development projects.

Barring any unforeseen circumstances, EcoWorld targets to complete the share placement by the third quarter of 2016.

In December last year, EcoWorld made known its intention to subscribe for up to a 30% stake in EWI in conjunction with its proposed IPO.

Shares in EcoWorld fell one sen or 0.78% at RM1.28 at the closing bell, with a market capitalisation of RM3.03 billion.

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This article first appeared in The Edge Financial Daily, on April 29, 2016. Subscribe to The Edge Financial Daily here.

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