ELK-Desa to raise RM59.84m through rights issue

PETALING JAYA: ELK-Desa Resources Bhd proposes to undertake a renounceable rights issue exercise to raise up to RM59.84 million.
In a filing with the stock exchange, the company said the proposed rights issue entails an issuance of up to 51.59 million rights shares on the basis of one rights share for every five existing shares held, with an issue price of RM1.16 per rights share.
Proceeds raised will be used for the purpose of the hire purchase disbursements of its wholly owned subsidiary ELK-Desa Capital Sdn Bhd.
ELK Desa has procured irrevocable written undertakings from chairman Teoh Hock Chai @ Tew Hock Chai, Eng Lee Kredit Sdn Bhd and ELK Group Sdn Bhd to subscribe in full their respective entitlements under their direct shareholdings in ELK-Desa and subscribe by ways of excess rights shares application for all the remaining rights shares.
In view of the irrevocable undertakings, their collective shareholdings may increase to more than 33%, hence an exemption will be sought from undertaking a mandatory take over offer.