R.E.A. Holdings Proposes Capital Reduction to Enhance Dividend Capacity

R.E.A. Holdings plc has announced a proposal to reduce its capital by $20 million, a move aimed at increasing its distributable reserves. This initiative involves reducing the company's share premium account, subject to shareholder approval at a general meeting scheduled for 22 October 2025. If successful, this would enhance the company’s ability to pay dividends, particularly when internal cash flows allow.

The company currently faces a gap between its existing distributable reserves of $8 million and the $8.8 million needed for annual preference dividends. This proposal would allow excess capital from shares issued above nominal value to be used for dividends—previously inaccessible due to it being in a non-distributable reserve.

The board has expressed confidence in the proposal's benefits, urging shareholders to favor the resolution, given the substantial assets held by the group. However, the proposal requires approval from the High Court of England and Wales to become effective.