Alcom proposes 32 sen a share capital repayment

PETALING JAYA: Aluminium Company of Malaysia Bhd (Alcom) has proposed to undertake a capital reduction and repayment to its shareholders of up to RM42.99 million or 32 sen per share.
The exercise will cancel the company’s share capital by up to RM42.99 million whereby the company’s share capital shall reduce from RM142.44 million to between RM99.46 million and RM100.12 million.
Alcom intends to fund the proposed capital repayment through external borrowings.
It explained that the proposed capital repayment forms part of the group’s capital management strategy, which seeks to achieve a more efficient capital structure.
“After taking into consideration the current financial standing (including its cash and cash equivalents reserves and zero gearing), future financial obligations and operational requirements of Alcom and its subsidiary, the board proposes to undertake the exercise, which is also intended to reward the shareholders of Alcom for their continuous support,” Alcom said in a stock exchange filing.
The additional interest expense incurred on borrowings required to fund the exercise is expected to reduce Alcom Group’s earnings and earnings per Alcom share for the nine-month financial period ending Dec 31, 2017.
The exercise is expected to be completed in the third quarter of the calendar year 2017.