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Duty Free to return S$41.94m to shareholders if EGM approves

MAINBOARD-LISTED Duty Free International intends to return surplus capital to shareholders through a cash distribution of S$0.035 per ordinary share, subject to approval at an extraordinary general meeting (EGM) to be convened.

The largest duty-free and duty-paid retail group in Malaysia announced on Thursday its plan for the capital-reduction exercise. This would reduce Duty Free International's issued and paid-up share capital by S$41.94 million from S$410.2 million as at the date of this announcement to S$368.3 million.

If carried out, Duty Free International would have a more efficient capital structure, thereby improving shareholders' return on equity, according to the announcement.

In its regulatory statement, Duty Free International said that the pro forma net asset value per share would dip to 36.58 sen after the reduction exercise from 47.11 sen, gearing ratio would rise to 4.96 per cent from 3.85 per cent, and return on equity to increase to 10.52 per cent from 8.17 per cent.

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The capital reduction and cash distribution are not expected to have any impact on earnings per share.

Separately, the exercise price of its warrants will be adjusted accordingly because of the capital reduction.

Duty Free International closed at S$0.145 on Thursday, unchanged from Wednesday and before the capital-reduction proposal was announced.