KUALA LUMPUR (April 23): Ekovest Bhd, controlled by its executive chairman Tan Sri Lim Kang Hoo, has proposed to raise up to RM202.59 million via a private placement to third party investors to be identified later, to repay bank borrowings, fund its property development projects and for working capital.
In a filing with the stock exchange today, Ekovest said the proposed placement entails the issuance of up to 256.45 million new shares, representing 10% of the total number of its issued shares.
As at April 22, 2019, Ekovest has 2.14 billion shares, 120.33 million options under its employees’ share option scheme and 304.13 million warrants.
Assuming the placement shares are issued at an indicative issue price of 79 sen per placement share, a discount to the five-day volume-weighted average market price of 79.37 sen per Ekovest share up to April 22, the proposed exercise is expected to raise gross proceeds of between RM169.06 million and RM202.59 million.
Of this, RM100 million has been earmarked to repay bank borrowings, between RM64 million and RM97 million to fund property development projects and another RM4.82 million to RM5.35 million for working capital.
Ekovest said as at April 22, the group's total borrowings amounted to RM6.4 billion. As such, the repayment of borrowings amounting to RM100 million is expected to result in annual gross interest savings of RM6 million for the group, it added.
Meanwhile, the proceeds to be raised from the proposed private placement will be used to partially fund the development cost of the EkoTitiwangsa and EkoCheras Hotel projects.
Barring any unforeseen circumstances, the proposed private placement is expected to be completed by the third quarter of 2019.
RHB Investment Bank Bhd has been appointed as the principal adviser and placement agent for the proposed exercise, while Astramina Advisory Sdn Bhd has been appointed as the financial adviser.
Ekovest shares fell as much as 18 sen or 18.6% to a low of 79 sen in morning trade. This follows an announcement by the group to Bursa Malaysia to clarify that it is not involved in the revived Bandar Malaysia project. The stock ended the day down 10 sen or 10.31% at 87 sen today, with 222.65 million shares done, bringing a market capitalisation of RM1.86 billion.
https://www.theedgemarkets.com/article/ekovest-raise-rm2026m-private-placement-0
