Xidelang plans par value reduction, ESOS

KUALA LUMPUR (July 22): Xidelang Holdings Ltd is proposing a par value reduction by canceling 3.9 US cents out of the par value of every existing issued and unissued share of four US cents each, to facilitate the implementation of an employees' share option scheme (ESOS).

In a bourse filing today, the China-based casual and sports footwear manufacturer said as of July 15, its closing price was six sen or 1.4 US cents, which is at a discount of about 65% to the existing par value.

“The proposed par value reduction is to facilitate the company to be more aligned with the no par-value regime adopted in Malaysia, pursuant to the Malaysia Companies Act,” it said.

According to the Companies Act 2016, which came into effect in 2017, all shares of a company issued before or upon the commencement of the Act, shall no longer have a par or nominal value.

On the ESOS, Xidelang said it will involve up to 15% of its issued and paid-up capital for eligible directors and employees of the company and its subsidiaries.

The corporate exercises require Bursa Securities’s approval, as well as shareholders' approval at a special general meeting to be convened.

Xidelang’s directors expect the proposals to be completed by the third quarter of 2020.

The group’s share price closed unchanged at six sen today, giving it a market capitalisation of RM108.29 million. Some 45.66 million shares were traded. Year-to-date, the stock has fallen 50% from 12 sen on Dec 31, 2019.