Ekovest seeking private placement to raise funds for RTS Link project

• As of Aug 21, Ekovest’s issued share capital stood at RM1.14 billion comprising 2.7 billion shares.

KUALA LUMPUR (Aug 30): Ekovest Bhd has proposed to undertake a private placement of up to 10% of its issued shares to strategic and/or institutional investors to raise up to RM117.27 million — mainly to fund the construction cost of the Rapid Transit System (RTS) Link project.

As of Aug 21, Ekovest’s issued share capital stood at RM1.14 billion comprising 2.7 billion shares.

The placement, to be implemented in tranches, entails the issuance of up to 269.58 million new shares, with the issue price of the first tranche fixed at 43.5 sen per share, representing a discount of 4.35 sen or 9.09% to the group's five-day volume weighted average market price up to and including Aug 29 of 47.85 sen per share, its bourse filing showed.

The issue price of the remainder of the placement shares is yet to be fixed, but is assumed to also be at 43.5 sen, which could raise a total of up to RM117.27 million for the group, of which RM86 million will be used to partially fund the RTS Link. Of the balance, RM28.47 million will be used for working capital and RM2.8 million to defray the placement's expenses.

“The proposed private placement will allow the company to onboard strategic and/or institutional investors to improve Ekovest’s current shareholding mix while raising the requisite funds to partially fund the construction cost of the RTS Link project as well as the working capital requirements of the group,” it said in a bourse filing.

The group has appointed Public Investment Bank Berhad and UOB Kay Hian Securities (M) Sdn Bhd as joint placement agents to help identify institutional investors, the group said.

The private placement is expected to be completed by the fourth quarter of 2023, subject to the approvals of the relevant authorities being obtained.

Ekovest, via its wholly-owned subsidiary Ekovest Construction Sdn Bhd (ECSB), accepted in July last year the RTS Link contract worth RM1.98 billion from Adil Permata Sdn Bhd (APSB) — the main contractor of the project — to undertake the engineering, procurement and construction (EPC) work of the project.

Shares of Ekovest were last traded at 48 sen on Wednesday as the trading of its securities was halted for one hour from 2.34pm to 3.34pm to make way for the placement announcement. On resumption of trading, it jumped to 54 sen, up ninesen from Tuesday's close, for a market capitalisation of RM1.45 billion.

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