Shares of Fraser and Neave (F&N) rose on Friday morning after the Singapore-listed conglomerate said it would distribute about $607 million to its shareholders in a capital reduction exercise.

F&N gained 17 cents, or 2.7 per cent, to $6.37 by 11.15am on Friday, with more than 800,000 shares traded.

Shareholders are to get 42 cents per share, the company said in a press release on Thursday evening.

It added that the exercise will not result in a cancellation of shares or a change in the number of shares held by shareholders.

The capital reduction "will allow F&N to reward its shareholders for their loyalty and support and achieve a more efficient capital structure", the company said. It is subject to approval by regulators and F&N shareholders.