KUALA LUMPUR (Sept 24): Encorp Bhd plans to raise RM5.51 million via a private placement to fund its business expansion activities and working capital requirements, as well as to address its public shareholding spread.

In a bourse filing yesterday, the property developer said it will be placing 30.61 million shares — representing 10% of its share capital — to selected third-party investors.

Based on an indicative price of 18 sen per share, Encorp said the exercise would result in the group raising RM5.51 million, of which RM1.5 million will be used to fund future developments or investments.

Another RM3.76 million would be used as working capital, which could be deployed for property development rebranding and marketing for Encorp Strand Mall and staff-related costs, the group said.

Encorp said that as of Aug 28, its public shareholding spread stood at 22.5%, contravening Bursa Malaysia's listing requirements.

"As such, the proposed placement is to be implemented primarily for the company to increase its public shareholding spread," the group said.

Encorp said it has not undertaken any equity fundraising exercise in the past 12 months.

It added that following the placement, it would have a share capital of 337.08 million shares. The exercise is expected to be completed in the first quarter of 2021.

The Federal Land Development Authority (Felda) is the group's largest shareholder with a 64.38% stake, while Azhar Mohd Awal and Atman Hanafi Abdullah control a 13.07% stake via Anjakan Masyhur Sdn Bhd.

Following the placement, Felda's stake would shrink to 58.33% and Anjakan Masyhur's holding would decline to 11.88%.

Encorp shares closed 7.89% or 1.5 sen higher at 20.5 sen, valuing the group at RM62.83 million yesterday. The counter saw 10,100 shares transacted.

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