DIRECTEL (08337) has announced a proposal to implement a capital reduction, which involves reducing the par value of each issued ordinary share from HK$0.20 to HK$0.01 by canceling paid-up capital up to HK$0.19 per issued ordinary share. As a result, following the reduction, the par value of each issued ordinary share in the company's share capital will be HK$0.01, and each such share will become a new ordinary share.

The credit arising from the capital reduction will be recorded in the company's capital reduction reserve account. The board of directors will determine the use of this reserve, including any application to offset the company's accumulated losses, based on the company's financial condition from time to time and in accordance with the Companies Act, as well as the company's memorandum and articles of association.

Immediately after the capital reduction takes effect, each authorized but unissued ordinary share will be subdivided into 20 authorized but unissued new ordinary shares, each with a par value of HK$0.01.