K-One Technology Berhad (KLSE:K1) is proposing to undertake a capital reduction and repayment exercise to facilitate the distribution of a special dividend of up to 75 million ringgit to its shareholders, according to a Wednesday filing to the Malaysian stock exchange.
The move follows the planned disposal of its cloud business arm Global Access Points for 94 million ringgit. It is aimed at rationalizing its capital structure and balance sheet, including by setting off accumulated losses, and returning excess capital to shareholders.
The proposed special dividend distribution of up to 0.09 ringgit per share will consist of a special dividend of up to 47.6 million ringgit and a capital repayment of 27.4 million ringgit arising from the proposed capital reduction and repayment.
The payout will only be undertaken after completion of the disposal of Global Access Point.
After the capital reduction, K-One's issued share capital will decline to 77.6 million ringgit through the cancellation of 46 million ringgit in capital.
Following the disposal and capital reduction, the company's retained earnings are expected to rise to 85.38 million ringgit, which will fall to 10.38 million ringgit after the payout.