Friday 29 Mar 2024
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KUALA LUMPUR (Feb 13): Eastern & Oriental Bhd (E&O) shares rose as much as 5.5 sen or 6.47% to 90.5 sen so far today on bargain hunting after the stock's largest single-day fall yesterday, following the property developer's announcement on Monday of its proposed private placement and rights issue of new shares.

At 10:33am today, the counter was actively traded at 88.5 sen, with some 28 million shares exchanging hands. Yesterday, the stock closed 24 sen lower at 85 sen.

On Monday, E&O said the private placement will involve issuance of new shares, which constitute up to 10% of the company's existing issued share capital.

E&O said the issue price will be determined later. E&O also announced a renounceable rights issue of new shares together with free detachable warrants at an issue price and basis to be determined later.

"Whilst the minimum aggregate proceeds (of RM250 million) is determined, subject to the finalisation of the terms of the proposed fund raising, the company may potentially raise up to an aggregate proceeds of approximately RM550 million should all entitled stockholders and/or their renouncees, where applicable, subscribe in full for their respective entitlements under the proposed rights issue with warrants. It is the intention of the company to implement the proposed rights issue with warrants after the completion of the proposed private placement," E&O said.

Yesterday, MIDF Amanah Investment Bank Bhd analyst Jessica Low Jze Tieng wrote in a note that MIDF is neutral on E&O's fund raising as the share dilutive impact from the private placement and rights issue should be mitigated by interest savings to E&O.

"We maintain our neutral call on E&O with unchanged target price of RM1.22, based on 68% discount to RNAV (revalued net asset value)," Low said.

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