EcoWorld International proposes RM500mil capital reduction to facilitate distribution target

KUALA LUMPUR: Eco World International Bhd has proposed to undertake a RM500mil reduction in its issued share capital, which will facilitate the group's dividend distribution target of up to RM504mil in 2024 and 2025.

Upon successful completion of the proposed capital reduction, the property developer said it intends to declare a first tranche of dividend amounting to at least RM144mil.

The date for the declaration of the first tranche dividend will be announced at a later date.

President and CEO Datuk Teow Leong Seng said the strong appreciation of the British pound against the ringgit has enabled the group to repatriate more sales proceeds in ringgit than anticipated.

He added that the group's gearing is close to nil, with the exception of a one-term loan at its EcoWorld London joint venture, for which the group has set aside sufficient funds for repayment following its maturity in March 2024.

"In the absence of any immediate plans to undertake new launches or acquisitions in the near term, the current working capital requirements of our group are expected to be lower than those in previous years.

"After taking into consideration our reduced working capital and funding requirements and given the limited development opportunities on the horizon, our group will continue to focus on monetising our completed stocks for cash generation.

"As such, the Board believes it is in the best interest of shareholders for our group to return the excess cash generated,” he said in a statement.

Subject to the approval of the shareholders of the company at the upcoming 10th Annual General Meeting, the proposed capital reduction is expected to be completed by the first half of 2024.

In the previous financial year, EcoWorld International had undertaken a RM1.5bil reduction in issued share capital in August 2023.

Subsequently, it declared an interim dividend of RM792mil representing 33 sen a share and a final dividend of RM144mil representing six sen a share in August and December 2023 respectively.