EcoWorld to use placement proceeds for EWI subscription

SEMENYIH (Oct 12): Eco World Development Group Bhd (EcoWorld) said it intends to use the proceeds from its latest private placement to partly finance its subscription of Eco World International Bhd (EWI), which is slated for listing.

Its president and chief executive officer Datuk Chang Khim Wah told the media this today after the group's extraordinary general meeting (EGM) to seek approval for the private placement, comprising up to 591.06 million shares, representing 25% of EcoWorld's existing issued and paid-up share capital.

The group expects to raise about RM768 million in proceeds, with RM389 million earmarked for the subscription of EWI shares.

"Our shareholders have approved all the resolutions. Part of the proceeds from the exercise are planned to be used for our proposed subscription to Eco World International Bhd (EWI). As you know, we are taking between a minimum of 20% (and) up to a maximum of 30%," he said.

EWI — whose property projects are mainly in the UK and Australia — has seen its initial public offering date delayed since the initial plan for a listing in July amid the various unexpected developments in the global economy, including Brexit.

Chang declined to comment on EWI but EcoWorld chairman Tan Sri Liew Kee Sin mentioned that EWI will be announcing an update next month, without elaborating.

The Edge Weekly had reported earlier this year that tycoon Tan Sri Quek Leng Chan was keen on acquiring a substantial stake in EWI.

Besides the subscription in EWI, RM93 million of the proceeds from the placement exercise will be used to fund EcoWorld's land acquisition in Ijok for its RM15 billion Eco Grandeur township development, which saw an 81% take-up during its launch on Sept 25.

Meanwhile, RM195 million will be used to pare down the group's borrowings, while the balance will be used to meet its working capital requirements and to cover the estimated expenses of the exercise.

At 2.59pm, Eco World's share price was unchanged at RM1.34, translating to a market capitalisation of RM3.17 billion. — theedgemarkets.com  

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