Eastland Equity to raise up to RM2.65m via private placement

TheEdge Thu, Oct 03, 2019 06:59pm - 1 year ago


KUALA LUMPUR (Oct 3): Eastland Equity Bhd has proposed to raise up to RM2.65 million via a private placement of up to 10% of its total issued shares to third party investor(s) to be identified later.

The proposed private placement follows close on the heels of a fundraising exercise in June, which saw the diversified group raise RM4.23 million through the issuance of 49.13 million shares or 20% of its then total number of shares.

Eastland said proceeds from the latest proposed private placement will be used to repay bank borrowings, for working capital and to finance the group’s property development activities. As at Aug 31, its total borrowings stood at RM58.24 million.

In a bourse filing today, the group said the proposed private placement entails the issuance of up to 29.48 million new shares, representing not more than 10% of its total issued shares.

As at Sept 30, Eastland's issued shares stood at 294.8 million. The proposed private placement will increase the size of Eastland's issued shares to up to 324.28 million post-exercise.

Assuming the placement shares are issued at an indicative issue price of 9 sen per placement share, which represents an 0.11% premium to the five-day volume weighted average market price of Eastland shares of 8.99 sen apiece up to Sept 30, the proposed exercise is expected to raise up to RM2.65 million.

Eastland said the proposed private placement will not address the group’s current financial concerns as the estimated gross proceeds to be raised would not be sufficient to meet its funding requirements in the long-term or to improve its financial performance.

"However, the proposed private placement serves as an interim measure for the group to address its impending cash flow requirements, while allowing the group to explore the acquisition of land/joint development rights.

"In the event such acquisition (when materialised) requires additional funding, the group will explore other funding options including debt and/or equity," it added. 

Eastland has appointed AmInvestment Bank Bhd as the principal adviser and placement agent for the proposed exercise, which is expected to be completed by the fourth quarter of the year.

Eastland shares closed unchanged at 8.5 sen today, with 240,000 shares done, bringing a market capitalisation of RM25.06 million.

 






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