Inix plans par value reduction to pare losses, 2-into-1 share consolidation thereafter

by **Cals** Tue 10 May 2016, 10:21

Inix plans par value reduction to pare losses, 2-into-1 share consolidation thereafter

By Gho Chee Yuan / theedgemarkets.com | May 9, 2016 : 8:37 PM MYT

KUALA LUMPUR (May 9): Inix Technologies Holdings Bhd is planning to reduce by half the par value of its shares by cancelling five sen from the 10 sen value to eliminate its existing accumulated losses.

The stock, which has been on a downward spiral since November last year, has lost nine sen or 64.3% in its share price to close at a low of five sen today — below its current 10 sen par value — valuing it at RM20.86 million.

Year to date, the counter has declined three sen or 37.5%, underperforming the FBM KLCI's 3.56% drop.

Its filing today noted that the below-par-value share price has deterred the company from raising funds from the equity market.

Hence, it hopes its par value reduction plan will provide it greater flexibility to raise funds and implement corporate proposals, which entails the issuance of new shares closer to its market price in the future.

As at May 6, Inix's issued and paid-up share capital was RM41.73 million, with 417.27 million shares.

The proposed par value reduction is expected to give rise to a credit of RM31.29 million, which will be used to offset its accumulated losses, which stood at RM15.15 million as at July 31, 2015.

"The remaining credit after the off-setting of the accumulated losses shall be retained in the capital reserves account of the company," it added.

Subsequent to that, the information technology company, which ventured into land reclamation last year, plans to consolidate every two shares of five sen each into one consolidated share.

"The proposed share consolidation will result in the adjustments to the market price and the number of Inix shares held by the shareholders of Inix," it said.

As such, its issued and paid-up share capital will increase to RM102.57 million, comprising 512.83 million shares, assuming the outstanding of 78.5 million outstanding warrants were exercised.

Subject to shareholders' approval at an extraordinary general meeting to be convened, it expects the proposals to be completed by the second half of 2016.