Rex International plans to undergo a capital reduction exercise to reduce accumulated losses. Specifically, the company plans to cancel some US$168.1 million in capital, but without reducing the share base.
“This serves to rationalise the balance sheet of the company to reflect more accurately the value of its underlying assets, and thus the financial position of the company,” says executive chairman Dan Broström on Nov 23.
“In addition, the company would be in a better position to retain profits and enhance its ability to declare dividends, where appropriate, if the accumulated losses are written off,” he adds.
Under the proposal, the company’s share capital would be reduced from US$257.7 million as of Dec 31 2021, to US$89.6 million.
“The directors will take into consideration the present and future funding needs of the company and its subsidiaries before declaring any dividends,” says Broström.
Rex International shares closed at 23 cents on Nov 23, down 2.13% for the day and down 28.13% year to date.