KUALA LUMPUR (May 3): XOX Bhd has proposed to undertake a share capital reduction to wipe out RM303 million of the virtual mobile network operator’s accumulated losses.
The company, which had been in the red for five straight years, had racked up losses totalling RM307.48 million by the end of 2023 despite a slew of fundraising exercises.
XOX raised nearly RM300 million in the three financial years of 2020, 2021 and 2022 in the equity market, including through share issuance, private placements, four-for-two rights issue of preference shares, and employee share option scheme.
All in all, the company has issued nearly four billion shares over the years.
The group currently has a share base of 5.19 billion issued shares, with issued share capital of RM472.34 million. The counter closed at one sen on Friday, giving it a market capitalization of RM38.93 million.
It has 77.97 million outstanding preference shares and 171.84 million outstanding ESOS options. On April 27, its board extended the ESOS expiration for another three years to May 27, 2027.
XOX is in a net debt position, with long-term loans of RM89.8 million against RM30.56 million cash and short-term deposits.
The proposed share capital reduction is subject to shareholders’ approval. XOX’s shareholding is highly fragmented with the largest shareholder Key Alliance Bhd holding just 6.7% stake, or 347.9 million shares.
XOX said it had 2.5 million subscribers of its XOX brand mobile network at the end of last year, up by about 270,000 subscribers from the year before, according to its annual report.
It has been in the red in the last seven years, and was only profitable for two years since 2011.
In the first quarter ended Dec 31, 2023 (1QFY2024), the group's net loss widened to RM18.67 million or 0.37 sen per share, from RM2.85 million a year ago. Revenue meanwhile fell 11.84% to RM61.65 million from RM69.93 million.
The company also booked impairment loss of RM5 million on investment in associates, and another RM631,000 impairment on trade receivables, which was lower than RM739,000 impairment recorded in the same quarter of 2022.