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Saturday, August 22, 2009

E&O plans RM4b launches over next 3 to 4 years

PROPERTY developer Eastern & Oriental Bhd (E&O) plans to launch RM4 billion worth of properties over the next three to four years, as the local economic and property market conditions improve.

Of the total, half will be launched in Penang and the rest in the Klang Valley.

"Six to nine months ago, everyone was cautious in some ways and sceptical about buying in the high-end market.

"But based on our experience and performance in Penang and Kuala Lumpur over the last three months, we believe we can still continue to launch (properties) and expect good response at least for the rest of the year," said managing director Datuk Terry Tham after the company's extraordinary general meetings in Kuala Lumpur yesterday.

"So far, as far as our launches are concerned, we are fortunate that all of our them have been well received, with at least 80 per cent of the properties sold," he added.

Tham said the company may hasten its launch of the RM4 billion worth of properties to two years, if the market recovers faster than expected.

E&O, which received shareholders' nod to raise some RM200 million via a rights issue yesterday, plans to raise another RM300 million internally.

"We are looking at disposing of inventories and non-strategic landbank. So far, we have raised some RM100 million through these initiatives," said executive director Eric Chan.

Proceeds from the RM500 million fund-raising could be used to increase cash flow, lower gearings, as well as for expansion. E&O expects to raise the funds over the next 18 months.

E&O's net gearing, which as at March 31 stood at 0.79 times, could be lowered to as low as 0.16 times via the fund-raising.

By Business Times (by Goh Thean Eu)

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