KUALA LUMPUR: Straits Energy Resources Bhd
has proposed a RM90mil reduction of its issued share capital to partially offset the company’s accumulated losses.
In a filing with Bursa Malaysia, Straits Energy said the proposed exercise would involve cancelling RM90mil of paid-up share capital that is substantially lost or unrepresented by available assets.
The corresponding RM90mil credit will be used to partially offset the company’s accumulated losses, which stood at RM101.91mil as at June 30, 2026.
Any balance credit arising from the exercise will be placed in a capital reserve account, which may be used to offset future losses or for other purposes permitted by law.
As at Aug 28, Straits had issued share capital of RM159.31mil comprising 1.09 billion shares.
Following the proposed reduction, its issued share capital would fall to RM69.3mil, while the number of shares in issue would remain unchanged.
Straits said the exercise would not result in any payment to shareholders or change their shareholdings. It would also have no material effect on the group's earnings and earnings per share for the financial year ending June 30, 2027.
Based on its unaudited results for the financial year ended June 30, 2026, the exercise would partially offset the company's accumulated losses and fully eliminate the group's accumulated losses of RM39.17mil.
The proposed capital reduction is subject to shareholders' approval at a general meeting and confirmation by the High Court of Malaya, as well as other relevant approvals if required.
Barring unforeseen circumstances, the exercise is expected to be completed in the first quarter of 2027.
Straits said the proposed capital reduction would allow the company to partially offset its accumulated losses by cancelling part of its issued share capital that is substantially lost or unrepresented by available assets.
It added that the exercise would strengthen its capital position and provide greater flexibility in managing its financial position and capital structure.
