KUALA LUMPUR (Jan 31): The board of Eduspec Holdings Bhd has proposed to undertake a capital reduction to cancel RM107.31 million of its paid-up share capital to offset accumulated losses.
The exercise is expected to transform the financial position of the education services provider from an unaudited accumulated loss of RM54.44 million as at Sept 30, 2018 to RM62.83 million in retained earnings.
According to the group, this exercise will enable it to rationalise its financial position by reducing the accumulated losses via cancellation of the paid-up share capital which is lost or unrepresented by available assets.
The reduction of accumulated losses in turn is expected to enhance the credibility of both the company and the group with the bankers, customers, suppliers, investors and other stakeholders, Eduspec said in a stock exchange filing today.
The remaining balance (if any) [of the credit arising from such share capital reduction] will be credited to the retained earnings of the company.
It said the proposed share capital reduction would not have any effect on the groups earnings per share, its structure and its substantial shareholders holdings.
The proposal is subject to the approval of shareholders of Eduspec at a forthcoming extraordinary general meeting.
Should shareholder and relevant approvals be obtained, the exercise is expected to be completed by the second quarter of the year.
Eduspec closed 0.5 sen or 25% up to 2.5 sen, valuing the group at RM25.05 million.
