KUALA LUMPUR (Jan 8): Erdasan Group Bhd, formerly known as AT Systematization Bhd, has proposed a share capital reduction to eliminate up to RM100 million of its accumulated losses.

The move is part of the group's strategy to align its capital structure with its current and future business needs, according to Erdasan. The company told Bursa Malaysia that the proposed exercise would strengthen its credibility with bankers, customers, suppliers and investors, while providing a more robust financial platform for future growth.

Erdasan is engaged in various businesses, including the fabrication of industrial and engineering parts, design and manufacturing of industrial automation systems and machinery, renewable energy operations, and property leasing.

As of Dec 23, 2024, Erdasan's issued share capital stood at RM228.54 million, comprising 228.79 million ordinary shares and 15.63 million outstanding warrants (Warrants C) at an exercise price of RM1.05.

At the group level, Erdasan's accumulated losses totalled RM72.7 million as of Sept 30, 2024. Following the capital reduction, the company will have retained earnings of RM34.63 million.

Erdasan has been loss-making since 2016. For the six months ended Sept 30, 2024, the company reported a net loss of RM7.6 million, down from the RM15.44 million it incurred over the same period in the previous year, mainly due to lower share of losses from associates.

The share capital reduction is expected to be completed by the second quarter of 2025, with M&A Securities appointed as the principal adviser.

On Wednesday, Erdasan's shares rose half a sen or 3.57% to close at 14.5 sen, giving the company a market capitalisation of RM32 million.