Shareholders of Sapphire Corp, which focuses on urban engineering projects in China, have approved a capital reduction plan that will see them receiving proceeds of 4.563 cents per share. Sapphire shares last traded at 9.8 cents.
Shareholders who voted at an EGM held on Dec 9 approved the plan to reduce the company's capital from $98.5 million to $73.7 million.
With the capital reduction, the Sapphire’s net asset value per share would drop to from RMB1.5602 (30 cents) to RMB 1.3294, or 26 cents.
According to Sapphire, the capital reduction will let it write off the accumulated losses of some $6.15 million, distribute the excess capital, rationalise the balance sheet so that it is a more accurate reflection of its financial position.
In addition, the capital reduction will facilitate future equity-related fund-raising exercises to recapitalise and strengthen the balance sheet of the company.
“The company would also be in a better position to retain profits and enhance its ability to pay future dividends, when appropriate, if the accumulated losses are written off,” said Sapphire in its EGM circular.
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On Sept 8, the company reported earnings of 9.2 million RMB for 1HFY2022 ended June, nearly double from 1HFY2021's RMB4.7 million.
Revenue in the same period was up 86.2% y-o-y to RMB56.9 million.
