Citaglobal Berhad (BURSA: CITAGLBL, 7245) has proposed a RM255 million capital reduction exercise aimed at eliminating accumulated losses and creating retained earnings, paving the way for a potential share buy-back programme and improving its ability to reward shareholders in the future.
The proposed capital reduction will reduce the company’s issued share capital by RM255 million pursuant to Section 117 of the Companies Act 2016. The resulting credit will be used to fully offset accumulated losses of approximately RM217.7 million, with the remaining balance transferred to retained earnings. Following the exercise, retained earnings are expected to stand at approximately RM37.1 million based on the company’s latest unaudited financial statements as at 30 June 2026.
Citaglobal said the proposal will not involve any cash outflow to shareholders, changes to the number of shares in issue, or adjustments to the company’s share price. The exercise is intended to strengthen the balance sheet and enhance financial flexibility.
In tandem with the capital reduction, the company is also seeking shareholder approval for a share buy-back mandate of up to 10% of its issued shares, equivalent to approximately 56.33 million shares based on the current share base. At the five-day volume-weighted average price of RM1.07 per share, the maximum buy-back value would amount to approximately RM60.27 million.
The board said the share buy-back programme would provide flexibility to acquire shares when they are trading below intrinsic value, potentially enhance earnings per share, and offer an additional avenue to return value to shareholders.
Following completion of the capital reduction, Citaglobal’s retained earnings position is expected to support both future dividend considerations and the proposed buy-back initiative. The company expects the capital reduction to be completed by the first quarter of 2027, subject to shareholder and regulatory approvals.
Astramina Advisory Sdn Bhd has been appointed as financial adviser for the proposals.
