KUALA LUMPUR (Jan 4): Sports footwear and apparel maker Sinaran Advance Group Bhd (SAG), formerly known as K-Star Sports Ltd, has proposed to undertake a RM68 million capital reduction via cancellation of its issued share capital to eliminate its accumulated losses.

The proposed exercise will result in its share capital being reduced to RM42.74 million, resulting in a capital reduction of RM68 million, which will be utilised to offset the accumulated losses of RM69.21 million at the company level.

"The proposed capital reduction will accurately reflect our group’s financial position by eliminating the accumulated losses of our company via the cancellation of our company’s issued share capital, which is substantially unrepresented by available assets of our company," said SAG in a filing with Bursa Malaysia on Thursday.

The proposal is also aimed at enhancing SAG’s ability to declare and pay dividends out of its retained earnings in the future and provide a better financial platform for the group’s future growth moving forward, it added.

As at Jan 3, 2024, the issued share capital of SAG was RM110.74 million, comprising 914.96 million shares.

SAG said the proposed capital reduction will not result in any adjustment to its share price and the existing number of shares in issue.

The proposed exercise is subject to the approval of SAG’s shareholders at a forthcoming extraordinary general meeting to be convened. Barring any unforeseen circumstances, it is expected to be completed in the second quarter of 2024.

M&A Securities Sdn Bhd has been appointed as the principal adviser to SAG for the proposed capital reduction.

SAG shares closed unchanged at eight sen on Thursday, with 2.48 million shares traded. Its market capitalisation stood at RM73.2 million.