Speculation of an impending rights issue by Eastern & Oriental has been put to rest by the company. “E&O is not planning a rights issue,” Eric Chan, deputy MD of E&O, said in an email reply. Talk of a rights issue surfaced recently after Sime Darby Bhd had emerged as the single largest shareholder of E&O after buying a 30% block in the latter from three major shareholders. It was speculated that the rights issue was to fund the land reclamation works for E&O’s Seri Tanjung Pinang project in Penang. If a rights issue were to have been called, there would have been the likelihood of Sime Darby taking up more than its entitlement. This, in turn, could lead to the plantation giant crossing over the 33% shareholding mark, thus triggering a mandatory general offer (MGO) for the rest of the E&O shares. However, now that E&O has denied that it is proposing a rights issue in the near future, Sime Darby’s stake in E&O is likely to remain status quo. (Starbiz)
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