Vodafone Qatar on Sunday announced that it has obtained the approvals of Qatar Financial Markets Authority (QFMA) and the economy and trade ministry for cutting its capital.
Moreover, the company received the approval of its shareholders at the company’s extraordinary general assembly on 19 March 2019, according to a filing to the Qatar Stock Exchange (QSE).
The telecom firm will trim its capital to QAR 4.22 billion from QAR 8.45 billion through reducing the nominal value of the company’s shares from QR 10 per share to QR 5 per share.
The decision will enable the company to extinguish its accumulated losses associated with the amortisation costs of the company’s telecommunications networks and services licence (Licence).
It is worth noting that the transaction has no impact on the value or the number of the shares held by shareholders or on the cash position or financial liquidity of the company, the statement showed.
“The Company’s Licence was previously extended for an additional 40 years to 2068, which reduced the associated amortization cost annually from QR 403 million to approximately QR 84 million,” the statement added.
Reducing the company’s capital will deliver the long term growth potential of the company and attract new investors, in addition to enabling future payment of dividends in line with the applicable law and the company’s articles of association, it added.
“We are delighted to now be able to proceed with the implementation of a capital reduction that will undoubtedly play a significant role in the growth of the Company and deliver value to our shareholders,” Sheikh Hamad Abdulla Jassim Al Thani, CEO of Vodafone Qatar, commented.
By the end of Thursday’s session, Vodafone Qatar’s stock retreated 0.23% at QAR 8.64.