KUALA LUMPUR (Feb 25): EcoFirst Consolidated Bhd is proposing a private placement of up to 107.08 million new shares to raise up to RM22.5 million, mainly to fund its land acquisition and business expansion.

In a filing with Bursa Malaysia today, the property developer said these new shares, which represent about 10% of its total issued and paid-up share capital, are meant to be issued to independent third party investors to be identified later.

It added that the placement shares will be priced at a discount of not more than 10% to the volume weighted average market price of its shares for the five market days (5D-VWAMP), immediately preceding the price fixing date.

Based on an indicative issue price of 21 sen apiece, the group expects to raise gross proceeds of up to RM22.5 million.

According to the group, as much as RM15 million of the proceeds will be set aside for land acquisition related expenses and initial development expenses.

Recall that EcoFirst had, on Dec 31, 2013, entered into a conditional sale and purchase agreement to purchase two pieces of freehold land located in Ulu Klang here for RM145 million.

"The group intends to use part of the proceeds to be raised from the proposed private placement to partly finance the related expenses of the land acquisition," it added.

It is also setting aside RM4 million to finance any business expansion under the core business activities of the group in property development and investment.

Some RM3.2 million will be for working capital, while some RM330,000 will be used to defray expenses in relation to the private placement.

The group expects the private placement to be completed by the third quarter of 2016.

Shares in EcoFirst closed unchanged at 24 sen today, giving it a market capitalisation of RM175.24 million.