KUALA LUMPUR (Oct 2): Key ASIC Bhd has proposed to undertake a share capital reduction, which entails the reduction of RM46 million, to eliminate the company’s accumulated losses and any balance that will be credited to its retained earnings account.

In a filing with Bursa Malaysia today, Key ASIC said the proposed exercise will enable the company to rationalise its statement of financial position by eliminating its accumulated losses.

“The elimination of accumulated losses in the statements of financial position of the company may enhance its credibility with customers, suppliers and investors,” said Key ASIC.

As at May 31, 2018, Key ASIC's accumulated losses at the company level stood at RM45.71 million.

As at Sept 24, 2018, being the latest practicable date (LPD) prior to this announcement, its issued share capital was RM73.74 million comprising 930.57 million shares.

In addition, as at the LPD, the company has 406,000 outstanding options pursuant to the company’s employee share option scheme (ESOS), which can be exercised into 406,000 new shares at the exercise price of 14.5 sen each.

Assuming all of the Outstanding ESOS Options are exercised into new Key ASIC Shares and the Proposed Share Capital Reduction is completed after the issuance of the private placement Shares, this will result in Key ASIC total issued share capital at 1.11 billion shares worth RM66.22 million.

Notably, the company had on Jan 26 and Feb 27, 2018 obtained approval from Bursa Malaysia and its shareholders, respectively for the placement of up to 222.74 million shares. As at the LPD, 40 million shares had been issued pursuant to the private placement.

Barring any unforeseen circumstances, the board expects the proposed share capital reduction to be completed by the first quarter of 2019.

Shares of Key ASIC closed unchanged at 20.5 sen today, with 6.06 million shares, for a market share capitalisation of RM190.77 million. Over the past year, the stock has climbed nearly 52% from 13.5 sen.