MTDC schedules AGM for 31 August amid proposed rights issue

The Maldives Tourism Development Corporation (MTDC) has announced that its Annual General Meeting (AGM) will be held on 31 August.

According to the company, the meeting will take place in the evening at the ballroom of Hotel Jen. Shareholder registration for attendance has been opened.

The announcement comes as reports emerge that MTDC's Board of Directors has approved a proposal to present a rights issue to shareholders at the AGM.

Sources familiar with the matter told Dhauru that the board approved the proposal through an 8–1 vote.

MTDC's board currently consists of nine directors, including five representatives of public shareholders and four government-appointed directors.

According to the sources, the proposed rights issue would involve the issuance of additional shares, allowing existing shareholders to purchase new shares in proportion to their current holdings.

Rights issues are commonly used by companies to raise capital. Shareholders may choose whether to subscribe to the new shares offered.

Sources claim the proposal could result in the government becoming the majority shareholder of MTDC if public shareholders do not fully participate in the share offering.

The government currently holds a 47 per cent stake in the company.

The reported proposal follows debate over the future of GDh. Maguhdhuvaa, a resort island leased to MTDC by the government.

Sources have alleged that the proposed restructuring is linked to plans to transfer the island's head lease to the company operating Ayada Maldives. According to those sources, a number of public shareholders have opposed the transaction, making government majority ownership necessary for the proposal to proceed.

MTDC has previously denied reports that it intends to sell the ownership or lease rights of any island.

The company has attempted rights issues in the past, although those efforts reportedly received limited shareholder participation.

The agenda released for the AGM does not include any item relating to changes in the company's share capital structure or a proposed rights issue.

According to the published agenda, only shareholders registered as of 11 August will be eligible to participate in the meeting.

The agenda also states that the Board of Directors has approved a proposal to distribute a dividend of MVR 0.50 per share from the company's profits for the previous financial year.

The AGM is expected to consider the matters listed on the agenda and provide shareholders with an update on the company's performance and future plans.