KUALA LUMPUR (Jan 10): Key Alliance Group Bhd (KL:KGROUP) has proposed to consolidate its shares on a 30-to-one basis.

The proposed share consolidation is part of its capital management plan to improve its capital structure and aims to reduce the volatility of the trading price for its shares, the company said in its bourse filing.

Based on its closing price of 0.5 sen on Jan 3, according to the filing, the shares could theoretically adjust to 15 sen post-consolidation. Upon completion, the group's share base would shrink to 122.61 million shares from 3.68 billion, with a share capital of RM193.39 million.

Key Alliance has also proposed a capital reduction of up to RM96 million from its issued share capital. This will be used to offset its accumulated losses of RM101.05 million at the group level as of Sept 30, 2024 (2QFY2025), reducing outstanding losses to RM5.26 million.

“The reduction of accumulated losses is expected to enhance the credibility of both the company and the group with, among others, its bankers, customers, suppliers and investors,” it said.

Key Alliance has been loss-making for seven out of the past nine financial years.

In the financial year ended March 31, 2024 (FY2024), the company’s net loss contracted to RM11.21 million from RM21.81 million in FY2023, although revenue fell 30% to RM33.89 million from RM48.69 million.

It expects the proposals to be completed by the second quarter of 2025, subject to all relevant approvals being obtained, with TA Securities as its principal adviser.

Shares in Key Alliance closed 0.5 sen or 100% higher at one sen on Friday, giving the company a market capitalisation of RM36.78 million.