Golden Energy to carry out capital reduction exercise to write off US$401.2m

GOLDEN Energy and Resources is planning to carry out a capital reduction exercise to write off losses of US$401.2 million that the firm has accumulated up to the end of 2015.

These losses arose from impairment losses for subsidiaries and their doubtful debts; loss on disposal of subsidiaries; mandatory convertible bonds issued by United Fiber System, the previous incarnation of the firm; and finance, legal and professional fees for various past corporate exercises.

The group plans to cancel share capital by the same amount.

"This serves to rationalise the balance sheet of the company for it to be an accurate reflection of the value of its underlying assets, and thus the financial position of the company," said Golden Energy in its announcement.

The capital reduction will also facilitate future equity-related fund raising exercises, it added.