KUALA LUMPUR (July 14): Spring Gallery Bhd is planning to halve the par value of its existing ordinary shares of 50 sen each to reduce its accumulated losses.

The company also plans to do the same for the par value of its existing irredeemable convertible preference shares (ICPS) of five sen each.

In a bourse filing today, the full-services engineering solutions provider said both the corporate exercises should give rise to as much as RM44.43 million in credit, which it intends to use to offset its accumulated losses of RM30.08 million at the company level and RM29.1 million at the group level as at financial year ended June 30, 2015 (FY15).

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

As at July 13, 2016, Spring Gallery's issued and paid-up share capital was RM88.85 million, with 128.74 million shares.

Spring Gallery said the proposed par value reduction will not result in any adjustment to the market price and total units held by the shareholders, be it shares, ICPS and/or warrants.

To facilitate the corporate exercise, it plans to amend its Memorandum and Articles of Association, which will see the company's capital of RM550 million divided into 2 billion shares of 25 sen each, instead of 1 billion shares of 50 sen each.

Spring Gallery expects the proposals to be completed by the first quarter of 2017.

Its shares closed 0.5 sen or 0.84% lower at 59 sen today, for a market capitalisation of RM75.96 million.