China Yuanbang Property proposes capital reduction

WATCH-listed China Yuanbang Property Holdings is proposing a capital reorganisation to reduce the par value of each share from HK$2.00 to HK$0.10.

As at Sept 3, the authorised share capital of the company is HK$600 million (S$106 million) divided into 300 million shares with a par value of HK$2.00 each, of which 69,400,000 shares have been issued and are fully paid up.

The amount of credit arising from the capital reduction in the sum of HK$131.86 million will be credited to the contributed surplus account of the company, the group said.

The capital reorganisation will "mitigate the limitations generally associated with the concept of par value, allow for more meaningful financial reporting and provide the company with greater flexibility on its future capital structure to enable the company to take advantage of opportunities as and when they arise", the group said in a statement.

The concept of par value is applicable to the company as it is incorporated in Bermuda, which (unlike certain other jurisdictions such as Singapore) has yet to abolish this concept. Under the laws of Bermuda, shares of a Bermuda company may not be issued at a price which is lower than the par value of the shares.

Approval for the reorganisation will be sought from shareholders at a special general meeting to be convened.