Diversified Gateway shares plunge, on active trade after announcing capital reduction

PETALING JAYA: Shares of Diversified Gateway Solutions Bhd (DGSB) fell as much as 25% and was on active trade this morning after it proposed a capital reduction exercise.
The stock fell as much as 1.5 sen or 25% to trade at a low of 4.5 sen from its last adjusted closing price of 6 sen. At midday, the stock was 1 sen or 16.67% lower at 5 sen with 32.81 million shares traded, making it the top active stock on the bourse.
Yesterday, DGSB announced a proposed capital reduction exercise, which will give rise to a credit of RM100 million to set off its accumulated losses of RM102.77 million at the company level as at June 30.
The group said in a filing with the stock exchange that the capital reduction will result in the reduction of its share capital from RM160.05 million to RM60.05 million. DGSB also plans to consolidate every two existing shares into one share.
It said that the proposed capital reduction will enable the group to rationalise its financial position and reflect more accurately the value of the underlying assets.