Citaglobal proposes RM255 million capital reduction to enable share buyback
The proposed repurchase covers up to 56.33 million shares, or 10% of issued shares, with an illustrative cost of approximately RM60.27 million.
Citaglobal Bhd has proposed reducing its capital by RM255 million to eliminate accumulated losses and establish retained earnings that would allow share repurchases, according to its bourse filing on Oct 15.
The company said the resulting credit would fully offset RM217.72 million in accumulated losses recorded at June 30. A remaining RM37.06 million would go into retained earnings. It attributed the losses mainly to past operating losses and impairments of investments in subsidiaries, incurred before turnaround initiatives began from 2021 onwards.
The proposed buyback would cover up to 56.33 million shares, equivalent to 10% of the 563.31 million shares issued at Sept 30. Using an illustrative RM1.07 per share, based on the five-day volume-weighted average market price, Citaglobal put the cost of a full repurchase at approximately RM60.27 million. Funding would come from internal resources and external borrowings.
Citaglobal said the capital reduction would leave its issued share count unchanged and would not trigger share price adjustments. Apart from estimated proposal expenses of RM228,000, it would involve neither cash outflows nor payments to shareholders.
Subject to shareholder approval at an extraordinary general meeting and barring unforeseen circumstances, the company aims to complete the capital reduction by the first quarter of 2027.
Citaglobal closed at RM1.02, up seven sen or 7.37%, giving it a market capitalisation of RM574.63 million.
