Market surprised at timing of E&O’s cash call

(file pix) Artist impression of the Seri Tanjung Pinang Phase Two project showing two bridges connecting Straits Quay and Gurney Drive to the reclaimed island. starpic by chan boon kai. 25/8/2013

THE market’s reaction to Eastern and Oriental Bhd’s (E&O) cash call is to be expected. At a time of increasing uncertainty, and when the property market is seeing a slowdown, a cash call by a property developer can be unnerving for shareholders.

In E&O’s case, the massive RM550mil cash call through a private placement and rights issue is worrying because of the dilutive impact it will have on its shareholders.