Malaysia´s renowned property developer, Eastern & Oriental Bhd (E&O) will be strengthening its working capital position by raising RM500 million to prepare for high-end property launches worth RM4 billion, revealed executive director Eric Chan.
Malaysia´s Star Online reported that the developments would be launched in the coming months. The working capital will be raised internally by E&O through disposing of stocks and non-strategic landbanks to raise RM300 million. The remaining RM200 million will be raised via a 1-for-2 rights issue which is expected to be completed by November, according to Chan.
The group plans to launch Seri Tanjung Pinang condominium on Penang island that has gross development value (GDV) of RM2bil while it will go ahead with the sale of Phase 2 of St Mary Residences, or Tower A in Klang Valley. Tower A´s GDV is RM750 million, a marked up price by 25% to RM1,250 per sq ft. The increase in price is due to the fact that new phase would consist of completely fitted out units says Chan.
E&O´s other launches would include Jalan Conlay condominium at Jalan Yap Kwan Seng as well as an office tower development which forms part of the St Mary project. The company aims to sell at least 20% of St Mary Residences Phase 2 to foreign investors as its has currrently campaigning in Singapore, Hong Kong and Guangdong, China.
E&O suffered a net loss of RM31.7 million for its 2009 financial year compared to a net profit of RM128.5 million in the previous year. Chan said the company had a current gearing of 0.79 which would be reduced to 0.46 with the rights issue. This could be further reduced to 0.16 with RM300 million to be raised via the disposal of stocks and non-strategic landbanks, he added. The group has total borrowings of nearly RM900 million.
Source: Asia Property Report - October 06 - News
