KUALA LUMPUR (July 2): EA Technique (M) Bhd is issuing 121.62 million new shares at an issue price of 47 sen apiece to settle a debt of RM57.16 million that it owes its major shareholder, Sindora Bhd.

In a filing to the stock exchange today, the firm also said it is planning a private placement of up to 106.36 million new shares or about 17% of its enlarged total number of issued shares.

The company also proposed to issue up to 365.99 million free warrants on the basis of one warrant for every two existing shares.

Of the placement shares, 19.15 million will be placed to its managing director Datuk Ir. Abdul Hak Md Amin at 47 sen per share, said the group.

It added that 25.53 million placement shares will be placed to Sindora while 61.67 million shares will be placed to independent third party investors to be identified at a later date.

EA Technique said based on the issue price of 47 sen, the private placement is expected to raise gross proceeds of about RM50 million.

Of the proceeds, some RM39.36 million will be used to part finance the construction of three vessels, RM9.13 million for working capital and RM1.5 million to defray expenses, it said.

On the rationale for the exercise, the company said the debt capitalisation will result in gross interest savings of about RM3.6 million per annum.

At the midday break, EA Technique fell 1.12% or 0.5 sen to 44 sen for a market capitalisation of RM221.76 million.