FairPlay Properties approves decrease of share capital (NEUTRAL)

Shareholders of FairPlay Properties approved at an EGM held on 8 September decreasing the company’s share capital from BGN 55.8m to BGN 27.9m by cutting the nominal value of shares from BGN 2.00/share to BGN 1.00/share. The move follows a 1-for-2 reverse stock split. The decrease will be on account of property revaluation losses and part of the share capital will be moved to other capital. This is done in order to allow the company to distribute any future profits as dividend. Currently the company cannot pay out any profits because the law requires that after the dividend, the equity should not be lower than the sum of the share capital and reserves, while the REIT’s equity is lower than the sum of the share capital and reserves because of unrecovered losses.