Jadi Imaging share capital reduction

November 19, 2024

The Malaysian toner producer targets RM63 million ($13.3 million/€12.4 million) reduction to bolster financial footing.

Jadi Imaging Holdings Berhad has unveiled a plan to trim its issued share capital by RM63m ($13.3 million/€12.4 million), aiming to fortify its financial position by erasing accumulated losses. The exercise, carried out under Malaysia’s Companies Act 2016, is part of a broader strategy to improve financial stability and enhance future dividend potential, the company announced.

The proposed reduction will eliminate capital that is lost or unrepresented by assets. This move will result in a corresponding credit being applied to offset Jadi’s accumulated losses, which stood at RM74.4 million as of 31 March 2024. The company said this would create retained earnings for strategic use and reinforce its financial credibility among stakeholders, including bankers and investors.

Despite the scale of the operation, the company assured shareholders that the exercise would not alter the number of shares in issue or the holdings of individual investors. The share reference price will remain unchanged, and there will be no cash outflow, aside from a small administrative cost of RM170,000 ($35,870/ €33,490).

Jadi Imaging, which produces toner for printers, said the proposal would also support its ability to declare and pay dividends once the company returns to profitability.

The reduction is subject to shareholder approval at an extraordinary general meeting scheduled in the coming months. The company expects to complete the process by the first quarter of 2025, pending regulatory clearance.

The company also confirmed that the capital reduction would not affect its outstanding convertible securities, or any previously agreed financial obligations.

TA Securities Holdings Berhad is acting as the principal adviser for the exercise.