Ecobuilt shelves rights issue, to proceed with capital reduction

• The decision was made after considering the prevailing market conditions and that focusing on the capital reduction would better serve the company’s immediate objectives and streamline the regulatory process, Ecobuilt said in a bourse filing on Wednesday. 

KUALA LUMPUR (July 2): Ecobuilt Holdings Bhd (KL:ECOHLDS) has decided to call off its proposed rights issue and proceed only with a share capital reduction.

The decision was made after considering the prevailing market conditions and that focusing on the capital reduction would better serve the company’s immediate objectives and streamline the regulatory process, Ecobuilt said in a bourse filing on Wednesday. 

“The company will proceed to resubmit a revised draft circular to Bursa Securities in relation to the proposed capital reduction, in due course,” the company said.

Ecobuilt previously announced that the capital reduction exercise is to involve reducing RM35 million of its RM67.96 million share capital to eliminate the company’s RM29.45 million accumulated losses at end-August 2024, leaving it with pro forma retained earnings of RM5 million.

The now-aborted rights issue, which was to come after the capital reduction, would have comprised 420.72 million shares with free detachable warrants to raise fresh capital on the basis of one new share for every share held, with one warrant for every rights share subscribed.

Assuming an issue price of two sen per rights share, the exercise was expected to gross proceeds of up to RM8.41 million, with RM5.49 million going towards working capital and RM2.38 million to repayment of borrowings, the company had previously noted.

Shares in Ecobuilt were untraded on Wednesday. The counter last closed at three sen on June 26, valuing the company at RM12.62 million.

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