DIGI.COM BHD []’s wholly owned subsidiary DiGi Telecommunications Sdn Bhd (DiGiTel) has proposed to undertake a capital management initiative whereby DiGiTel would distribute approximately RM509 million to DiGi.Com.
In a statement Thursday, Sept 8, DiGi said the capital distribution would be via the issuance of redeemable preference shares, which upon redemption will result in a cash payment of approximately RM509 million to DiGi.
DiGi said it intends to distribute the excess proceeds from the capital distribution to all its shareholders by first half of 2012.
The company also said its board had a 1-for-10 share split, which would result in a proportional increase in the number of DiGi shares in circulation from the current 777.5 million shares to 7.775 billion shares.
DiGi chief executive officer Henrik Claussen said the proposed share split would keep the trading range of DiGi shares better aligned with its peers, and would also make DiGi shares more affordable and accessible to a wider reach of investors.
“These initiatives also reflects the Board’s and Management’s continuing confidence in the company’s business fundamentals and ability to deliver solid earnings and cash-flow going forward,” he said.
Written by Surin Murugiah of theedgemalaysia.com
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