Alibaba Health Information Technology (HKG:0241) proposed a 10 billion yuan reduction in its share premium account to facilitate dividend distributions, according to a Thursday Hong Kong bourse filing.

Shares of the digital health service provider fell 7% in late morning trade on Friday.

The company said the proposed reduction would transfer the amount from its share premium account to contributed surplus, enabling payment of a final dividend and a special dividend for the year ended March 31.

Alibaba Health proposed a final dividend of 0.0595 yuan per share and a special dividend of 0.1352 yuan per share.

The company said the proposal was necessary because it had insufficient contributed surplus available for distribution.

Alibaba Health's share premium account stood at about 51.7 billion yuan as of March 31, the filing showed.