Vodafone Qatar announced that it has obtained all requisite regulatory approvals from the Qatar Financial Markets Authority and the Ministry of Economy and Commerce to proceed with the implementation of a capital reduction, after obtaining the approval of its shareholders at the Company Extraordinary General Assembly on 19 March 2019.
The objective of the capital reduction is to enable the Company to extinguish its accumulated losses associated with the amortisation costs of the Company’s Telecommunications Networks and Services Licence (“Licence”). The transaction has no impact whatsoever on the value or the number of the shares held by shareholders or on the cash position or financial liquidity of the Company.
The capital reduction is essentially a balance sheet transaction effected by means of an accounting adjustment all within the “Total Equity” section. The share capital of the Company is reduced from QAR 8,454,000,000 to QAR 4,227,000,000 by way of reducing the nominal value of the shares of the Company from QAR 10 per share to QAR 5 per share.
The Company’s Licence was previously extended for an additional 40 years to 2068, which reduced the associated amortisation cost annually from QR 403 million to approximately QR 84 million. This delivers the long term growth potential of the Company, attracts new investors and enables future payment of dividends in line with the applicable law and the Company’s Articles of Association.
Commenting on this development, the Company’s CEO, Sheikh Hamad Abdulla Jassim Al Thani, said: “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. We look to the future with confidence and optimism, supported by a clear strategy and solid foundation for the next stage of our journey. On behalf of the Board of Directors, I’d like to thank the regulatory authorities and our valued shareholders for their continued support.”