PETALING JAYA: Eastern & Oriental Bhd (E&O) is looking to raise up to RM550.3 million via a private placement and rights issue with warrants to fund the Seri Tanjung Pinang Phase 2 (STP2) project and repayment of bank borrowings.
STP2 is E&O’s key development project which will be completed in phases over 15 to 20 years.
The project is divided into three phases and the first phase will be developed over a period of 15 years with an expected gross development value of over RM17 billion.
In a filing with Bursa Malaysia, E&O said the proposed fundraising exercise, which will enable the group to achieve a balanced capital structure, is estimated to raise at least RM250 million or up to RM550.3 million.
Under the maximum scenario, RM200 million will be used for repayment of borrowings, RM300 million for property projects, RM48.8 million for general working capital and RM1.5 million for estimated expenses of the proposed exercise.
As at Sept 30, 2018, the group has total loans and borrowings amounting to RM1.48 billion, including a RM350 million redeemable convertible medium term notes due in March and April 2020.
“Upon partial repayment of the borrowings, the group is expected to enjoy interest savings of between RM7.8 million to RM10.5 million per annum based on an average interest rate of 5.23% per annum assuming the partial repayment under the minimum and maximum scenario of RM150 million and RM200 million respectively,” it said.
The proceeds raised will also be used to fund The Conlay and The Peak projects in Kuala Lumpur.
