KUALA LUMPUR (Nov 1): Eden Inc Bhd plans to issue up to 155.68 million free warrants to shareholders on the basis of one warrant for every two shares held.

Assuming full exercise of the warrants at the exercise price of 19.6 sen, Eden said it will potentially raise maximum gross proceeds of RM30.51 million, which the group will use for working capital.

In a filing today, Eden also proposed to issue redeemable convertible medium term notes with an aggregate principal amount of up to RM60 million in four tranches, for a tenure of 36 months.

The notes bear an interest rate of 1% per annum.

Eden said RM16 million of the proceeds raised will be used for replacement and restoration of its Libaran Power Station in Sabah.

Another RM7 million will go towards repair and maintenance works for the Sungai Kenerong Hydroelectric Power Station in Kelantan, while the biggest portion of RM24 million will be used to repay borrowings,

Besides that, RM4 million will be used for refurbishment of its Underwater World Langkawi, an aquatic exhibition centre in Langkawi.

Of the balance, RM3.1 million will be used for working capital and RM5.9 million for expenses relating to the proposals.

Eden said it had entered into a conditional subscription agreement with Advance Opportunities Fund I (AOF) and Advance Capital Partners Asset Management Pvt Ltd (ACPAM) for the issuance of the commercial papers.

AOF is an open-ended fund incorporated in Cayman Islands while ACPAM is a fund management company incorporated in Singapore.

Tan Choon Wee is the principal director and shareholder of both AOF and ACPAM.

Prior to founding ACPAM, Eden said Tan had been managing the investment portfolio of Advance Opportunities Fund, an open-ended fund incorporated in the Cayman Islands, where he served as founder and director.

Eden also said Tan has over two decades of investment experience in the capital markets and held significant roles in major banking and stockbroking firms since 1991.

Eden, which has been loss-making since financial year ended Dec 31, 2013, said it has experienced difficulty in getting further bank borrowings or attract investors via issuance of new shares.

“The proposed notes issue will enable Eden to raise funds via the hybrid market, that is, between the debt market where gearing, security or rating may be an issue, and the equity market where current market conditions may not be conducive,” the group said.

Eden expects to issue the first tranche of the commercial paper, worth some RM20 million, by the first quarter of 2018.

The second and third tranches will worth RM15 million each, and the fourth RM10 million.

Eden’s share price remained unchanged at 18.5 sen today, giving it a market capitalisation of RM57.60 million.