|
Companies cancelling issuing shares as investors turning their backs
Ten of 30 companies that registered to issue shares to raise chartered capital earlier this year have proposed delaying their issuance plans, according to the State Securities Council (SSC).
In late 2007, Savico announced it would issue over 10mil shares to existing labourers and shareholders, strategic partners and big investors, in order to raise its chartered capital to VND250bil. However, only 5.5mil stakes were sold as big investors and strategic partners were indifferent to the share issuance in the context of the market’s falls.
Savico decided to continue issuing the unsold stakes in the first quarter of 2008. However, it, once again, had to delay the issuance due the sharp falls of the market.
When asked about the plan to sell the remaining stakes, Nguyen Vinh Tho, General Director of Savico, said that the company would flexibly choose the subjects to whom to sell, the share volume and prices, and the time to sell.
While Savico is still awaiting the most suitable moment to sell the unmarketable stakes left from the previous issuance, PAN has officially announced the delay of the issuance of 7.2mil shares to raise its chartered capital from VND70bil to VND140bil for an indefinite time, since the company’s share prices have been dropping dramatically.
Bibica has also sent a dispatch to SSC, asking for permission to delay its plan to issue over 4.6mil shares to existing shareholders because of the unfavourable conditions of the market.
Similarly, SFN, a textile company, has also decided not to raise its chartered capital to VND80bil as planned. Under the Securities Law, listed companies must raise their chartered capital to VND80bil by early 2009 at the latest.
The director of a company which is going to propose delaying the deadline for raising chartered capital to VND80bil said that it would certainly be unsuccessful issuing shares at this moment. Therefore, the list of companies asking for permission to delay their plans to raise capital will be longer in some days.
Huy Nam, a finance and securities expert in HCM City, said that he sympathises with listed companies in their decisions not to issue shares to raise chartered capital. If they still moved ahead with the share issuances, they would completely fail.
The VN Index is sliding to the 400 point threshold, the lowest level in the last three years, discouraging people. It is impossible to persuade pessimistic investors to inject more money in stocks.
However, Nam has warned that the delay of plans to issue shares shows the bad situation of the market, and will cause bad consequences: companies do not have capital, labourers do not have jobs and the national economy will suffer.
VNN
|
