Qatar First Bank (QFB) yesterday announced completion of obtaining all the necessary approvals to implement the process of reducing the bank’s capital.
Accordingly, and upon coordination with the relevant regulatory authorities, Qatar Stock Exchange will implement the process of reducing the bank’s paid-up capital to become QR700m, equivalent to 700million shares with a nominal value of one Qatari riyal per share, instead of 2 billion shares with a nominal value of one Qatari riyal per share, the bank revealed in a regulatory filing.
The implementation of the reduction process is expected on Monday, December 23, 2019. However, trading on the share with its new capital will be resumed on Tuesday, December 24, 2019. The formula for capital reduction to extinguish losses shall be used as followed by Qatar Stock Exchange.
Capital reduction, by definition, is the process of decreasing a company’s shareholder equity through share cancellations and share repurchases, also known as share buybacks.
The reduction of capital is done by companies for numerous reasons, including increasing shareholder value and producing a more efficient capital structure.
