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E&O to raise RM127.6mil via private placement

The Star Online logo The Star Online 13/3/2019
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PETALING JAYA: Eastern & Oriental Bhd (E&O) will raise about RM127.63mil via its proposed private placement exercise as the property developer seeks to pare down its debt and generate cash for its property developments and working capital.

The company told the stock exchange yesterday that the price for its new 130.23 million shares to be issued via private placement has been fixed at 98 sen per share.

“The issue price of 98 sen per placement stock represents a premium of 14.66% to the five-day volume-weighted average price of E&O stocks up to and including March 11, being the last traded day of E&O stocks immediately preceding the price-fixing date, of 85.47 sen per E&O stock,” the company said in a Bursa Malaysia filing.

On Feb 11, the company proposed to undertake a private placement exercise and a renounceable rights issue with free warrants in order to raise additional funding.

E&O has said previously that both corporate exercises will enable the company to raise funds without incurring additional interest expense, thereby minimising any potential cash outflow in respect of interest servicing.

“The proposed fund raising will strengthen the financial position and capital base of E&O by reducing its gearing level and increasing its net assets thereby providing greater financial flexibility,” it said.

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