KUALA LUMPUR (March 17): APFT Bhd has proposed to reduce the par value of its shares by cancelling 15 sen out of the par value of every existing ordinary share of 20 sen to eliminate its existing accumulated losses.

The stock, which has been on the downward spiral since the beginning of this year, saw its share price fall below its par value. It fell one sen or 15.38% to close at its historical low of 5.5 sen, valuing it at RM23.89 million.

Year-to-date (YTD), the counter has declined 19.5 sen or 78%, underperforming FBMKLCI's 4.74% drop.

It noted that this had deterred the company from raising funds from the equity market.

Hence, by lowering its shares' par value, the company said it will provide greater flexibility to raise funds and to implement corporate proposals, which entails the issuance of new shares closer to its market price in the future.

As at March 16, APFT issued and paid-up share capital was RM86.87 million, with 434.33 shares.

Following the completion of the proposed exercise, its issued and paid-up share capital will increase to RM102.57 million, comprising 512.83 million shares, assuming the outstanding of 78.5 million outstanding warrants were exercised.

According to the flight training academy operator, the proposed par value reduction will give rise to a credit of RM76.93 million, a portion of which will be utilised to offset its accumulated losses.

"The remaining credit after the off-setting of the accumulated losses shall be retained in the capital reserves account of the company," it added.

It plans to eliminate its audited accumulated losses as at Dec 31, 2015, of RM27.93 million and unaudited accumulated losses (as at Dec 31, 2015) of approximately RM40.71 million, respectively via the proposed par value reduction.

To facilitate the reduction in the par value of its shares, it has also proposed an amendment to its Memorandum and Articles of Association.

The proposals are subject to its shareholders' approval at an extraordinary general meeting to be convened.

"Barring any unforeseen circumstances and subject to all approvals being obtained, the proposals are expected to be completed by the second quarter of the calendar year 2016," it added.