KUALA LUMPUR (March 28): Software and systems developer NetX Holdings Bhd (KL:NETX) has proposed a share capital reduction to wipe out up to RM200 million of the company’s accumulated losses.  

In a bourse filing on Friday, NetX said that the proposed share capital reduction will create a credit of up to RM200 million, which will be used to offset the company’s accumulated losses.  

Any remaining balance will be credited to the company’s retained earnings, providing an additional credit buffer to offset future losses, it added.

As of March 27, NetX had an issued share capital of RM212.03 million, comprising 937.95 million ordinary shares.

It had accumulated losses of RM200.91 million at the company level and RM119.47 million at the group level as at Nov 30, 2024.

Post-capital reduction, and taking into account RM200,000 for the corporate exercise's estimated expenses, NetX's accummulated losses would be reduced to RM1.1 million at the company level, while at group level retained earnings of RM80.33 million would be recorded.    

NetX has been loss making for the last seven years. In its latest financial year ended Dec 31, 2024, the group reported a net loss of RM28.33 million compared with a net loss of RM13.53 million in FY2023, mainly due to higher impairment on goodwill and unrealised forex loss, while revenue dropped to RM15.12 million from RM16.83 million.

M&A Securities is the principal adviser for the share capital reduction, which is expected to be completed in the second quarter of this year.

NetX shares closed unchanged at seven sen on Friday, valuing the group at RM66 million.