LONDON (Alliance News) – Urals Energy PCL announced on Friday proposals to reduce the company’s share premium account and consolidate its shares on a 1-for-20 basis to help stabilise its share price volatility and allow the company to start a dividend policy.
Under the proposals, which will be considered by shareholders at an extraordinary general meeting on May 26, the 300 million existing ordinary shares will be consolidated into 15 million shares. At the same time, the share premium account will be reduced from USD656 million to none by writing off losses of the company equivalent to this amount.
The company, which primarily operates in Russia, had announced in January that it will restructure its share capital after it reported production growth in 2016.
“The effect of the proposed capital reduction, if approved and finalised, will be to offset the company’s accumulated losses against its capital reserve, but still leave a balance of positive capital reserves, to allow the company to pay dividends in due course,” said Urals in January’s trading update.
Shares were down 4.7% to 6.55 pence on Friday following the announcement.
By Tom Rees; email@example.com
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