Bonvests revokes proposed dividends, implements pay cut to sustain operations

Singapore

BONVESTS Holdings announced on Wednesday that it will revoke its proposed dividend of one Singapore cent per share for the financial year ended Dec 31, 2019 on the back of the negative impact of the Covid-19 outbreak on its business.

The proposed dividend was previously announced on March 2 and is subject to shareholders' approval at the annual general meeting of the company to be held on April 29.

The company, which develops and operates hotels locally and overseas, said that the decision was made after "serious and careful deliberation by the board".

This comes as it saw demand for its hotels and resorts take a hit from the virus outbreak, the company said in a regulatory update.

"The payment of the proposed dividend would further reduce the current cash resources of the company," it said in a move to seek shareholders' support.

In addition, staff have also taken temporary pay cuts ranging from 10 to 50 per cent of their basic monthly salary, with the duration of the pay cut to be "reviewed on an on-going basis".

Non-executive and independent directors will also voluntarily take a 10 per cent reduction of the directors' fees for FY2019 compared to a year ago.

The measures were taken to conserve the cash resources of the group in order to sustain business operations and ongoing projects to "ensure the viability of the group until the Covid-19 situation improves".

The group also expects rental division, financial results and cash resources to be "progressively and seriously" affected with the prolonged virus outbreak.

The company also said that results of the group for FY2020 will "no doubt be adversely affected" by the pandemic.

Shares of Bonvests closed flat at S$0.95 on Wednesday.