KUALA LUMPUR: Maybank Investment Bank (Maybank IB) is positive on Eco World International Bhd‘s (EcoWorld International) latest corporate exercise involving a capital reduction (CR) of RM1.5 billion to facilitate dividend distributions to shareholders.

It said the exercise to facilitate a special distribution of up to RM900 million in 2023 was within Maybank IB’s expectation.

“However, we are positively surprised by the earlier-than-expected dividend payment of RM300 million (out of the RM900 million) by June 2023/ third quarter (of the financial year ending Oct 31, 2023).

“We maintain our earnings forecasts, target price (TP) of 66 sen and tactical ‘buy’ (call),” it said in a research note.

Maybank IB noted that the CR exercise would neither result in share price adjustment nor change the number of shares and cash flow, except for the estimated expenses related to the CR exercise.

The CR is subject to shareholders’ approval at an extraordinary general meeting and it would only be implemented after the full settlement of medium-term notes worth RM270 million which will mature on May 24, 2023.

At 11.03 am, EcoWorld International shares gained 2.5 sen to 58 sen with 6.04 million shares traded. – Bernama