Thursday, 9 March 2017 | MYT 11:41 AM
Eco World International to raise about RM2.58b from IPO

KUALA LUMPUR: Eco World International Bhd (EWI), which is the largest initial public offer (IPO) this year, expected to raise about RM2.584bil from the issuance of 2.153 billion news shares.

The prospectus issued on Thursday showed that the retail offering is RM1.20 a share while the bulk of the shares offered to insitutions at the institutional offering would be decided via a book-building as it seeks a listing on the Main Market of Bursa Malaysia.

The 2.153 billion new shares would comprise an institutional offering of up to 449.459 million shares to Malaysian and foreign institutional and selected investors at the institutional price to be determined by bookbuilding.

It said the retail offering of 408 million shares would be offered to the directors and eligible employees of EWI and its subsidiaries and joint ventures, directors of Eco World Development Group Bhd (EW Bhd) and the eligible employees of EW Bhd and its subsidiaries; entitled shareholders of EW Bhd and the Malaysian public, at the retail price of RM1.20 per IPO share.

“The final retail price will equal to the lower of the retail price of RM1.20 per IPO share; or the institutional price; and bonus issue of two free warrants in EWI (warrants) for every five EWI shares held after the IPO,” it said.

EWI said that out of the RM2.584bil to be raised from the IPO, a total of RM1.367bil or 52.9% would be used to repay bank borrowings and repayment of advances. Another RM1.126bil or 43.6% would be used for working capital and/or future land acquisitions.

EWI would also issue up to 960 million warrants and assuming all the warrants are converted into shares at the exercise price of RM1.45, this would enable it to raise RM1.39bil.

EWI recently signed three key agreements as part of its IPO process.

The first was a share subscription agreement with GuocoLand Limited for a strategic 27% stake in EWI’s enlarged issued and paid-up share capital.

Secondly, it signed a retail underwriting agreement with the six banks to fully underwrite the retail offering.

Thirdly, it signed cornerstone placement agreements with the Employees Provident Fund Board, Permodalan Nasional Berhad and Kumpulan Wang Persaraan (Diperbadankan) (KWAP) , which have agreed to subscribe for 212,400,000 Shares in the aggregate.

President and CEO of EWI, Datuk Teow Leong Seng said: “We are pleased with the interest shown by the cornerstone Investors and we look forward to the opening of the retail offering and the institutional offering today.”

The retail offering of 408 million IPO shares is fully underwritten by CIMB Investment Bank Bhd (CIMB), Maybank Investment Bank Bhd (Maybank) and Hong Leong Investment Bank Bhd, as joint managing underwriters and joint underwriters, and Alliance Investment Bank Bhd, AmInvestment Bank Bhd and RHB Investment Bank Bhd, as joint underwriters.

EWI said the projects being undertaken now include three sites in the UK. Through its joint-venture company, EcoWorld-Ballymore, EWI is developing three waterside residential projects in the east and west of London: Embassy Gardens in Nine Elms, London City Island in Leamouth Peninsula, East London, and Wardian London in Canary Wharf.

EWI is also developing a project in Australia called West Village in Parramatta – a suburb and major business district in the metropolitan area of Sydney.

Based on valuation reports prepared by Jones Lang LaSalle and m3property, the total estimated gross development value for all four projects is about RM12.96bil.