Eco World International Berhad announced that it is undertaking a corporate exercise to reduce RM1.5 billion of its issued share capital which the developer intends to setoff against the accumulated losses while the remaining balance is credited to the retained earnings.
The group said the rationale behind the exercise is 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 and to 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 (“First Tranche Dividend”) 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.
“The Proposed Capital Reduction is a concrete first step towards the realisation of EcoWorld Internationa; commitment to meet our targeted distribution of RM900 million to our shareholders as earlier announced. With cash balances of RM910 million as at 31 January 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 we are well placed to make a First Tranche Dividend distribution of at least RM300 million to shareholders following the completion of the Proposed Capital Reduction,” said Dato’ Teow Leong Seng, President & CEO of EcoWorld International.
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.
