Shares in Symphony Environmental Technologies PLC (LON:SYM) surged as the company proposed a capital reduction that could pave the way to dividend payments.
Shareholders are being asked to vote on a proposal that aims to create distributable reserves for the company by cancelling the amount standing to the credit of the share premium account and transferring it to the company's profit and loss account.
READ: Saudi Arabia gives Symphony Environmental's future a big boost
The share premium account, often referred to as shareholder funds, represents the difference between the par or nominal value of a company's shares and the price at which it actually issued the shares (companies may not issue new shares at less than their nominal value). Funds in the share premium account may not be distributed as dividends.
Symphony’s share premium account is in credit to the tune of £3.61mln.
Symphony said the distributable reserve will be applied, subject to any court order, in eliminating retained losses on the company's balance sheet; accordingly, the procedure will help to facilitate the payment of future dividends and strengthen the balance sheet of the company.
READ: Symphony Environmental continuing momentum after strong first half
Shares in the ecology-focused plastics technology company were up 12% at 13.72p in mid-morning trade.