A company has published shareholder meeting decisions: https://cns.omxgroup.com/cdsPublic/viewDisclosure.action?disclosureId=884745&messageId=1113616
Currently there are 40 794 850 shares with nominal value 0.1 EUR (making total share capital of 4 079 485 EUR) and market value (at the time of the meeting) around 0.12 EUR.
The meeting decided:
- Bump the nominal value to 1 EUR and exchange the shares 10:1 (10 existing shares becomes 1 new share). [number of shares becomes about 4 079 490]
- Decrease the share capital by reducing nominal value to 0.1 EUR and paying out 0.9 EUR per share.
- Issue 50 000 000 new shares (nominal value 0.1 EUR). Existing shareholders have preferrential rights to buy the new shares.
In the end there will be 54 079 490 shares and the share capital of 5 407 949. Thus the share capital is increased by 1.4 million euros and that's about all that changes. They will effectively have rebought 90% of the shares and issue even (a little bit) more new shares. The same outcome could seemingly been achieved by simply issuing 14 million new shares.
What could be the purpose of these actions? Is this a cash-out method or the other way around - a way to increase equity for some? Is that common or is this suspicious?