KUALA LUMPUR (Nov 18): Jadi Imaging Holdings Bhd (KL:JADI) has proposed a share capital reduction to wipe out RM63 million of the company’s accumulated losses.

The exercise is intended to enhance the credibility of the group with its bankers, investors, customers, and other stakeholders, according to Jadi Imaging's bourse filing on Monday.

“The proposed share capital reduction will enable the company and the group to rationalise their financial positions by reducing the accumulated losses.

“It will also enhance the company’s ability to declare and pay dividends out of the retained earnings in the future, as and when appropriate and when the company returns to profitability,” said Jadi Imaging.

As of Oct 29, Jadi Imaging has an issued share capital of RM115.42 million, consisting of 1.4 billion ordinary shares and 699.64 million outstanding warrants. These warrants are exercisable into an equivalent number of new shares at an exercise price of five sen per share.

Jadi Imaging’s accumulated losses stood at RM62.56 million at the end of its first quarter ended June 30, 2024 (1QFY2025).

The group has been loss-making in seven of its eight past financial years.

In FY2024, its net loss expanded to RM35.45 million, from RM10.86 million in FY2023, as revenue fell 27.4% to RM23.79 million, from RM32.77 million.

The proposed share capital reduction is subject to Jadi Imaging’s shareholders' approval, as well as a court order from the High Court of Malaya, confirming the capital reduction, in accordance with Section 116 of the Companies Act 2016.

The company has indicated that, barring any unforeseen circumstances, the reduction is expected to be completed in the first quarter of 2025.

TA Securities has been appointed as the principal adviser to Jadi Imaging for the proposed share capital reduction.

Jadi Imaging is involved in the manufacturing of toners for laser printers, photocopiers, facsimile machines, and multi-function office equipment.

Its shares closed unchanged at four sen on Monday, giving it a market capitalisation of RM55.98 million.