Eastland Equity proposes rights issue to raise up to RM39.8m

PETALING JAYA: Eastland Equity Bhd proposes a renounceable rights issue to raise maximum proceeds of RM39.8 million based on the indicative issue price of 13.5 sen per rights share.
Through its subsidiaries, the group develops and invests in property, operates tour and travel agencies, and provides leasing and hire purchase financing services. It also operates as licensed insurance brokers, trades timber, and operates hotel.
Eastland will issue up to 294.8 million rights shares with up to 147.4 million warrants, on the basis of six rights shares for every five existing shares held and one warrant for every two rights shares subscribed.
The group told the stock exchange that the proceeds will be utilised to finance its wholly-owned unit FBO Land (Setapak) Sdn Bhd's land acquisition of RM23.27 million cash.
FBO has entered into a conditional sale and purchase agreement with PCK Properties Sdn Bhd for the acquisition of a parcel of leasehold development land in Kota Kinabalu, Sabah measuring approximately 2,181.80 square meters.
In addition, Eastland said proceeds from the rights issue will also be used for the repayment of bank borrowings as well as working capital.
Barring any unforeseen circumstances, the proposals are expected to be completed in the second quarter of 2018.
Its share price was down one sen to close at 16 sen with some 538,100 shares changing hands.