KUALA LUMPUR (May 8): Eco World Development Group Bhd has raised total proceeds of RM2.8 billion for its growth and expansion plans, with the completion of the last leg of its corporate exercise yesterday following a 20% placement of shares to institutional investors.

The 20% placement raised proceeds of RM638.35 million and will see 394.04 million new shares issued at a subscription price of RM1.62 per share, which represents an 8.5% discount to the closing price of Eco World shares on May 7, 2015 of RM1.77 per share.

The subscription price also represents a discount of approximately 9.86% to the five-day volume weighted average market price of Eco World up to and including May 7 of RM1.80 per share.

The 20% placement shares, together with the earlier subscription of shares and rights issues with warrants which were completed in February and March 2015 respectively, brought the total proceeds raised from the entire corporate exercise to RM2.8 billion.

The book-building exercise in relation to the placement was completed on May 7 and had attracted strong demand from domestic and foreign investors, and the group’s order book was subscribed 1.41 times.

Eco World chairman Tan Sri Liew Kee Sin said the fact that the property development group had managed to receive 1.41 times subscription for a 20% placement of shares, given the tough market conditions, represented the strong vote of confidence institutional investors have in Eco World.

“We will certainly do our utmost to continue to strengthen the EcoWorld brand and deliver on all our promises to reward the faith which our customers and shareholders have placed in us,” he said in a statement today.

Eco World president and chief executive officer Datuk Chang Khim Wah said it has accumulated 5,245 acres of land bank, with a total remaining gross development value of RM61.2 billion to be developed.

“We have numerous exciting new launches coming up in the next few months, such as Eco Terraces in Penang and our luxury Eco Sanctuary township in the Klang Valley.

“For our Johor Bahru developments, we will be unveiling Eco Tropics in Iskandar Malaysia and Eco Business Park III in the Pasir Gudang growth corridor before the end of this financial year,” he said.

Chang added that the group is well placed to achieve its RM7 billion sales target for its financial years ending Oct 31, 2015 and 2016 with the completion of its corporate exercise.

Eco World (fundamental: 0.5; valuation: 0) shares were unchanged at RM1.77 at 4.22pm today, with a market capitalisation of RM3.47 billion.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)