Mlabs proposes capital reduction

PETALING JAYA: Mlabs Systems Bhd has proposed a capital reduction exercise to reduce the accumulated losses of the company which stood at RM22.5 million as at Dec 31, 2014.
The exercise involves the cancellation of 5 sen from the par value of every 10 sen shares and the proposed reduction of the share premium account of RM9.4 million.
In a filing with the stock exchange, Mlabs said the move provides the company with greater flexibility to raise funds at a more attractive price and to implement future corporate exercises, which entail the issuance of equity and equity-related securities including, among others, ordinary shares and convertible securities, thus enabling Mlabs to take advantage of future fund raising opportunities as and when the need arises.
“In undertaking the proposed capital reduction, the company has also considered that it would not result in any change to its net asset position,” it said.
It added that the exercise will not have any effect on the consolidated earnings and earnings per share of Mlabs.
The company expects the proposals to be completed in the first quarter of 2016 following obtaining shareholders approval at an EGM to be convened.