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Lacking capital, businesses are selling themselves
A lot of enterprises are putting themselves up for sale these days as they are facing big difficulties and seriously lacking capital.
A company with headquarters in Go Vap district in HCM City is now offering to sell a production line for making food for fish in Nha Be district at VND9bil. The company’s representative said that its financial capability is not good enough to maintain the designed capacity.
A Taiwanese businessman has decided to sell a garment workshop in Long Thanh district in Dong Nai province because he wants to scale down production. The price offered is $2.5mil. Also because of lacking capital for business, a company in Dak Lak, which has been operating for 30 years as the producer of agricultural equipment, is offering to sell a part of the company for VND6bil.
On www.muabandoanhnghiep.com, a website which provides information about companies for sale, one can see 219 offers to sell companies and projects. The things on sale are mostly real estate firms and projects.
Everything is available for sale on the website, from a company specialising in providing psychological consultancy services, to a company which is now exploiting a stone pit in Yen Bai and Lao Cai provinces. A school in Hanoi, which has received VND38bil in investment, is now offering itself for VND10bil. The most valuable project offered for sale on the website is a sea tourism complex in Vung Tau city, for which the seller asks VND370bil.
Lawyer Le Cong Dinh from DC Law, said that he is very busy now with many cases on selling, purchasing and merging enterprises. Dinh said that merger and acquisition is quite a normal thing in a market economy. It helps create many bigger businesses, powerful enough to compete with big rivals in the region and in the world.
One plus one gets three
An Pha Saigon Oil and Gas Company now holds the controlling stakes in four gas trading companies located in Hanoi, Dak Lak, Tay Ninh and HCM City as it purchased shares of the four in 2007.
Tran Minh Loan, Chairman of the company, has revealed that the company will buy stakes of several other gas companies.
“We are conducting negotiations with three more companies, and the negotiations may finish this year,” Loan said.
Loan said that gas companies have been successfully merging with each other because they share the same viewpoint that bigger companies will be more powerful and competitive than small ones.
“Gas distribution in Vietnam still shows a lot of shortcomings. We are striving to restore order to the market and we will compete with quality of services instead of prices,” he added.
Vo Thi Huyen Lan, Chief Representative of Jaccar investment fund, said that merger and acquisition (M&A) will become a trend in Vietnam.
She said that M&A deals are occurring in some securities companies in Vietnam. One or two years ago, when the market was overly hot, all investors rushed to set up securities companies. However, as the market is falling, a lot of securities companies are facing big difficulties, and many of them are offering themselves for sale.
Lan said that in general, Vietnamese owners of enterprises do not want their businesses to be merged into others. However, Lan said they should think that M&A will benefit them. “We will not get two if we add one to one in M&A, but we will get three or four,” she said.
VNN
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