TextMagic plans to pay shareholders 2.6 million euros

In total, €2,550,000 will be paid to TextMagic shareholders. A photo: Andras Kralla

Despite the fact that TextMagic lost money last year, the company still plans to pay out money to shareholders, writes Äripäev.

The company’s chief financial officer, Fred Metsmaa, explains that since last year was a loss for the company, the payment of dividends became impossible. The loss, however, did not have a negative impact on cash flow, in connection with which TextMagic decided to find another way to pay cash to shareholders.

The share capital will be increased through a stock issue, which will be held at the expense of a €2,550,000 agio. After that, the share capital will be 3,400,000 euros. Taking into account 8,500,000 shares, the book value of the company will increase by 0.3 euros per share to a total of 0.4 euros per share.

The company will then reduce share capital by reducing the book value per share by 0.3 euros, which will allow shareholders to pay these 0.3 euros per share, for a total of 2,550,000 euros.

“Issuance is, in fact, a return to shareholders of their own money, so income tax is not paid,” Metsmaa said.

In total, €2,550,000 will be paid to TextMagic shareholders. The company emphasizes that payments should not significantly worsen the liquidity of the company or affect the launch of a new product.

Payments are expected to be made by the end of January 2023. Since we are talking about a reduction in the authorized capital, the decision should be supported by the shareholders of the company.

The net loss of TextMagic in 2021 was 94,000 euros. The company’s turnover reached 10.9 million euros, which is 38% more than a year earlier.

Source: https://www.dv.ee/ by www.dv.ee.

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