VELESTO PROPOSES RM1.2 BLN CAPITAL REDUCTION TO STRENGTHEN FINANCES

KUALA LUMPUR, March 25 (Bernama) -- Velesto Energy Bhd has proposed a capital reduction of RM1.2 billion, which will be credited to the retained earnings or to set off against any accumulated losses of the company.

In a filing with Bursa Malaysia, Velesto said the proposed capital reduction does not involve any cash outflow from the company and its subsidiaries or changes to the number of shares held by shareholders.

It is a non-dilutive exercise that does not affect shareholders’ equity, ownership structure, or the net asset value of the group.

Following the completion of the capital reduction, Velesto’s retained earnings are expected to be approximately RM1.33 billion and RM1.06 billion at the company and group level respectively, based on the unaudited financial results as at Dec 31, 2024.

“This exercise is a strategic step to optimise the company’s capital structure and position it for future distribution to shareholders,” the group said.

In a separate statement, Velesto president Megat Zariman Abdul Rahim said this exercise marks an important step in creating long-term value for shareholders.

“We previously undertook a similar capital reduction exercise in 2020, and since then, we have made notable progress in our financial recovery, recording profits in financial year ended Dec 31, 2023 (FY2023) and FY2024,” he said.

Velesto’s issued share capital amounted to RM1.84 billion comprising 8.21 billion shares as at Feb 28, 2025. Post-capital reduction, the share capital would be reduced to RM644.83 million.

The exercise is subject to shareholders’ approval and sanction by the High Court of Malaya. Barring unforeseen circumstances, it is expected to be completed by the third quarter of 2025.

-- BERNAMA