KUALA LUMPUR: Pegasus Heights Bhd
(PHB) will undertake a capital reduction of RM180 million of its issued share capital, which is lost and unrepresented by available assets.
As of May 3, 2023, the total issued share capital of PHB is RM210.18 million, comprising 10.82 million ordinary shares.
In a filing with Bursa Malaysia today, PHB said the corresponding credit of RM180 million, arising from the proposed capital reduction, would be utilised to eliminate the company’s accumulated losses.
Meanwhile, it said the balance would be credited to the retained earnings account, which might be utilised in such manner as the board deems fit.
"The proposed capital reduction will eliminate PHB’s accumulated losses via reduction and cancellation of the current issued share capital of the company to more accurately reflect the value of the underlying assets and the financial position.
"This exercise also will enhance the financial profile of PHB Group with its bankers, customers, suppliers, investors and other stakeholders of PHB group following the elimination of the accumulated losses,” said it said.
It said an order by the court would be sought to sanction the proposed capital reduction pursuant to Section 116 of the Companies Act after receipt of approval from PHB’s shareholders at an extraordinary general meeting (EGM) to be convened.
PHB said it also proposed to diversify its existing business activities and subsidiaries to include the moneylending business.
"The group plans to extend the moneylending business to segments such as small and medium enterprises and B40 segments, which are underserved by licensed financial institutions,” PHB said.
It said as a new entrant in the moneylending business, the company would develop its customer base gradually through methods such as providing flexible financing schemes to cater to a broader range of customers and offer moneylending services to those with limited access to banks.
"Even though the moneylending business is perceived to have a low barrier of entry and competitive, the board has decided to venture into it after considering the favourable outlook of the loan market with sustained loan growth,” it said.
Furthermore, it said the company could generate profit without any long gestation period in view of the potential profit margins to be derived from interest charges, which are capped at a maximum of 12 per cent and 18 per cent for secured and unsecured loans respectively as permitted by Section 17A of the Moneylenders Act.
It added that barring any unforeseen circumstances, the proposed diversification would take immediate effect upon obtaining approval from the shareholders at the EGM, while the proposed capital reduction is expected to be completed by the fourth quarter of 2023.
PHB is principally involved in property management such as leasing out of commercial properties, project management consultancy for property development and marketing events, trading of home appliances and investment holding.
Currently, the company derived most of its revenue from the trading and property management segments. - Bernama
