The Media Shoppe proposes share capital reduction and consolidation

by **Cals** Wed 07 Jan 2015, 09:42

The Media Shoppe proposes share capital reduction and consolidation

KUALA LUMPUR (Jan 6): The Media Shoppe Bhd ([You must be registered and logged in to see this image.] Financial Dashboard) is proposing a share capital reduction by halving the par value of its shares to five sen per share to more closely reflect the value of its underlying assets.
The capital reduction will result in the issued and paid-up share capital of TMS at RM87.02 million, comprising 870.2 million shares of 10 sen each, being reduced to RM43.5 million comprising 870.2 million shares of five sen each, it told Bursa Malaysia today.
The capital reduction will give rise to a credit of about RM43.5 million, which the company intends to utilise "by crediting the same against the accumulated losses of TMS", of about RM31.9 million as at 31 December 2013, it said.
Following the capital reduction, the group will undertake a share consolidation involving the consolidation of every two TMS shares of five sen each into one new TMS share of 10 sen each.
This means that the 870.2 million TMS shares of 5 sen each will then be consolidated into 435.091 million shares.
"The proposed share consolidation is going to increase the market price per TMS share but is not going to have an impact on the total market value of the TMS shares," said the group.
TMS said the proposals were being undertaken to return the company and its subsidiaries to a better financial standing and profitability.
"The board is of the view that [as] part of its on-going efforts to strengthen the group’s financial position, it is imperative that the accumulated losses of the company be eliminated," it said.
"The proposed share consolidation will provide an opportunity to improve the capital structure of TMS. As a result...there would be an immediate reduction in the number of TMS shares and easier management of a smaller number of shares," it added.
The proposals are expected to be completed in the first half of this year.
TMS shares closed unchanged today at 5.5 sen, for a market capitalisation of RM43.51 million.