Faber Group proposes par value reduction to pay off accumulated losses

KUALA LUMPUR: Faber Group Bhd has proposed to cancel 75 sen from the current par value of RM1 per share to 25 sen per share, with the credit of RM272.3 million arising from the exercise to lower the company's accumulated losses.

In a Bursa filing on Thursday, Mar 17, the company said the figure was derived from its existing paid-up share capital of RM363 million.

In addition, the company has also proposed to reduce the entire balance of its share premium of RM116 million, with the credit arising from the exercise to also be used to offset an equivalent amount of Faber Group's accumulated losses.

The company said the proposed exercises will lower its accumulated losses, "thus allowing it greater flexibility in determining FGB's future dividend payout, as cash dividends may only be paid out of the current year profits and/or retained earnings of the company".

Faber Group accumulated losses according to unaudited figures as at Dec 31, 2010, stands at RM25.8 million at the group level and RM422.1 million at the company level.

The proposed reduction of the par value and share premium is expected to result in retained earnings of RM361.7 million at the group level and accumulated losses of RM34.6 million of the holding company.

Faber Group's main activities are the provision of integrated facilities management in hopsitlals, commercial and residential properties and property development.

Some of its more recent projects include the residential Taman Danau Desa develipment, ARECA Residence, Armada Villa and Taman Hilltop Perdana.