du shareholders approve proposed capital reduction
Shareholders in Emirates Integrated Telecommunications Company or du, UAE’s one of the two telecom companies, have approved Board of Directors’ recommendation to reduce the company’s capital, state news agency WAM reported on Thursday.
The capital reduction is still subject to final approval from the Securities and Commodities Authority (SCA) as well as other relevant authorities, the agency said.
The company will allow a 30 day creditor notification period, expiring on 12th February, 2017, before proceeding with the capital reduction, it said in a statement filed to Dubai bourse.
The proposed capital reduction will involve nominally cancelling 38,522,582 shares held by du and previously allocated to its employee long-term incentive plan. The share cancellation represents approximately 0.84 per cent of the company’s total issued share capital which is currently 4,571,428,571 shares. Following the proposed cancellation, du’s total issued share capital will consist of 4,532,905,989 shares.
The company’s board believes that the capital reduction will provide shareholders with an enhanced shareholding in the company and will result in du having a more efficient capital structure, WAM said.
Dubai-based du had reported a 6.7 per cent drop in third-quarter net profit and it had similarly posted declining profits in the preceding seven quarters.
The company was set up in 2007 ending the monopoly of its rival Etisalat in the UAE’s markets.
It was trading on Dubai Financial Market at AED6.25 per share at 12 p.m.