Eco World International offers 2-for-5 bonus warrants

KUALA LUMPUR (March 3): Eco World International Bhd (EWI), the special-purpose vehicle set up by the EcoWorld Group in 2013 to acquire real estate assets overseas for development that is en route to a listing on the Main Market of Bursa Malaysia will allocate a bonus issue of two warrants in EWI for every five EWI shares held after its initial public offering (IPO).

“In conjunction with our IPO and as an incentive to our shareholders subsequent to our IPO, we will implement a bonus issue of up to 960 million warrants to be issued to all our shareholders prior to our listing, on the basis of two warrants for every five shares held by our shareholders after our IPO, and will be completed prior to our listing,” said EWI in its draft prospectus.

EWI plans to issue up to 2.15 billion shares for its IPO, which represent approximately 89.7% of its enlarged, issued and paid-up share capital.

Of that, up to 1.03 billion shares will be for institutional offerings — local and foreign — while 408 million shares will be for retail, which includes 120 million shares reserved for application by its directors and 240 million IPO shares for entitled shareholders of Eco World Development Group Bhd (EcoWorld).

EWI noted that Tan Sri Liew Kee Sin had declined the grant of any allocation to him under the restricted offer to EWI and EcoWorld directors as Liew will hold approximately 10.3% of its enlarged issued and paid-up share capital at the listing.

As such, only 48 million of the IPO’s shares will be reserved for application by the Malaysian public via balloting. Meanwhile, a minimum of 20% but not more than 30% of the enlarged issue and paid-up share capital will be allocated to EcoWorld or an entity nominated by EcoWorld.

While the pricing of its IPO and the amount to be raised have not been finalised, EWI said 56.6% of the proceeds to be raised will be for its working capital, 39.3% for debt repayment, 1.8% for the settlement of acquisition of EW Investment, and the remaining 2.3% for the estimated listing expenses.

EWI said the listing is “to enhance our company’s profile and visibility of our group’s property development business in overseas markets, as well as increase brand awareness and widen our market reach via the listing”.

The prospectus exposure also showed that as at Oct 31, 2015, EWI pre-sold private residential units in the UK and Australia are expected to deliver RM3.65 billion in revenue, of which approximately RM2.88 billion is attributable to the group’s projects in the UK and approximately RM770.5 million to the project in Australia.

The three projects in London are London City Island Phase 2, Embassy Gardens Phase 2 and Wardian London with a total estimated gross development value (GDV) of RM14.45 billion. The project in Sydney is West Village, Parramatta, which has an estimated GDV of RM950 million.

CIMB Investment Bank and Maybank Investment Bank are the joint principal advisers, joint global coordinators and joint bookrunners for the institutional offering in relation to the IPO.

Hong Leong Investment Bank is the joint principal adviser and joint bookrunner for the institutional offering, while UOB Kay Hian Securities (M) Sdn Bhd is the joint bookrunner with respect to the institutional offering outside Malaysia.

Do not ask your gardener about the value of your home. Click here at The Edge Reference Price to find out.

This article first appeared in The Edge Financial Daily, on March 3, 2016. Subscribe to The Edge Financial Daily here.