Eco World International Bhd president and chief executive officer Datuk Teow Leong Seng
KUALA LUMPUR: Eco World International Bhd
is undertaking a corporate exercise to reduce RM1.5 billion of its issued share capital pursuant to Section 117 of the Companies Act 2016.
The corresponding credit arising from the proposed capital reduction will be used to set off against the company’s accumulated losses while the remaining balance will be credited to the retained earnings of the company.
In a filing with Bursa Malaysia today, the company said it intends to distribute its estimated excess cash of up to RM900 million in 2023, after setting aside funds for the group’s estimated working capital and funding requirements and subject to meeting its sales targets and receiving the relevant approvals.
It would also provide additional headroom for further declaration of dividends by the company in the future in excess of the targeted distribution amount, arising from sales of the group’s remaining property units in the United Kingdom.
"Following the completion of the proposed capital reduction, EcoWorld International intends to declare the first tranche of dividend amounting to at least RM300 million out of the targeted distribution amount.
"The date of declaration of such dividend will be announced at a later date, subject to completion of the proposed capital reduction and compliance with all applicable laws and regulations,” its president and chief executive officer Datuk Teow Leong Seng said.
He said the exercise is a concrete first step towards the realisation of EcoWorld International’s commitment to meet its targeted distribution of RM900 million to shareholders as earlier announced.
With cash balances of RM910 million as at Jan 31, 2023, EcoWorld International has RM446 million of net cash after setting aside funds to repay the medium term notes (MTNs) due in April and May 2023.
As such, the board believes that it is well placed to make a first tranche dividend distribution of at least RM300 million to shareholders following the completion of the proposed capital reduction (PCR), Teow said.
"The PCR will only be implemented after full settlement of the MTNs on May 24, 2023. Following this settlement, we will have no more borrowings or gearing.
"As such, our lenders and bondholders will not be affected by this exercise,” Teow added.
The PCR is subject to the approval of the shareholders of the company at an extraordinary general meeting (EGM) to be convened and any other relevant authorities and/or parties, if required.
The date of the EGM will be announced by the company in due course. The PCR is expected to be completed by the second half of 2023. - Bernama
