Far EasTone announced recently that its Board of Directors approved a proposal of capital reduction exercise to return approximately NT$7.7 billion to shareholders.
The proposed capital reduction is in addition to the fiscal year 2006 cash dividend of NT$3.1 per share was announced on April 19.
FET said it believes it is in the best interests of both the company and shareholders to optimize the company's capital structure while still maintaining adequate preservation of the financial flexibility for further development of convergence of communication services in the future.
Returning cash by way of capital reduction will also improve the company's return on equity and earnings per share going forward.
"With a maintained strong cash flow and balance sheet, FET will continue its efforts to pursue opportunities for expansion of business and services along with our strategy for convergence of services," said Jan Nilsson, president and COO of FET.
Approximately 20 percent of the total outstanding shares will be cancelled in the process of capital reduction, which translates into about NT$2.0 per share to be returned to shareholders as at a books closure date which will be determined by FET. The total cash distribution is about NT$7.7 billion.
The proposed capital reduction is subject to all relevant regulatory approvals as well as shareholder approval. Assuming all approvals are received, it is expected that shareholders will receive the cash distribution by end of January 2008.