KUALA LUMPUR (Nov 8): Parkson Holdings Bhd has proposed to cancel RM2 billion of its issued share capital in a move to reduce the group's accumulated losses.

According to a bourse filing on Monday, the group is in the red as accumulated losses amounted to RM932.47 million as at June 30, 2021.

The group expects to return to the black with retained earnings of RM1.05 billion after the capital reduction exercise.

After the exercise is completed, its issued share capital will be reduced to RM2.15 billion from RM4.15 billion.

Parkson said that the exercise will allow the company and group to rationalise their financial positions by reducing their accumulated losses through the reduction of its share capital which is lost or unrepresented by available assets of the group while reflecting a more accurate picture of the value of its underlying assets and financial position.

The reduction of accumulated losses from the exercise is expected to enhance the credibility of the company with the bankers, customers, suppliers, investors and other stakeholders according to the retail group.

The proposal, subject to shareholders' approval, is expected to be completed in the first quarter of 2022.

Parkson's share price was flat at 22 sen on Monday, valuing the group at RM240.66 million.