PROPERTY firm Metro Holdings on Tuesday said its net cash is expected to decline as it seeks out property developments, following a call from an activist shareholder for a special cash dividend.
It was responding to an open letter from Quarz Capital Management dated Oct 4, 2016.
Metro said its current net cash position is a recent occurrence due to the sale of properties over the last one to two financial years.
“As we have sought to communicate at our AGMs and results briefings, the property division, which is the largest of Metro’s business units, is capital intensive,” Metro said in a statement.
“There are available opportunities to reinvest capital and Metro continues to carefully evaluate a pipeline of projects, taking into consideration property cycles across different geographies, as it has done in the past . . . Insufficient cash for potential capital deployment into these opportunities would affect Metro’s ability to build future income streams through recycling the cash.”
It added that Quarz is welcome to attend Metro’s shareholder meetings, where many of the issues raised in the open letter have been raised and considered.