|
Share issuance plan delays leave projects thirsty for capital
Enterprises have been moving heaven and earth to get capital from different sources for their investment projects, since their plans to raise capital from share issuance have not been approved by the State Securities Commission (SSC).
The director of a public company said that there is no legal document which says that enterprises are not allowed to issue more shares at this moment. However, it is clear that SSC has been trying to delay the approval of share issuance plans in order to limit the supply of shares on the stock market, as an abundant supply could make the market fall further.
“They (SSC) have come up with 1,001 excuses to reject share issuance plans. In many cases, the plans have been rejected because of very simple mistakes,” the director, who asked to remain anonymous, said.
Moreover, the director said that many projects which were expected to use capital mobilised from share issuances have been kicked off, and they are in desperate need of capital now.
A representative of DIC Trade and Investment Joint Stock Company complained that the delay in share issuance plan approval has brought losses to the company. DIC submitted its plan to issue more shares in late 2007; however, the plan was delayed as the state management agency tried to limit the supply of shares on the market. At that time, the prices at which DIC planned to sell stakes to strategic partners were believed to be double what DIC could sell them for nowadays.
Vien Dong Insurance Joint Stock Company has, finally, just got approval for its plan to issue additional shares. One of the goals of the plan is to get money to buy the house on Vo Van Tan street in HCM City for its headquarters, and make capital contribution to Vien Dong Securities Company. The purchase deal was completed, while the securities company debuted in July, but the company will not get money from the share issuance for one more month.
As investment projects have been kicked off, while enterprises still cannot mobilise capital from share issuance, they have to borrow money from banks to run the projects at high interest rates.
Some businesses say that they dare not speed up the construction process of projects as they cannot arrange enough capital. Others say they are ‘out of breath’ seeking capital, while they will have to pay bank debts in a short time from now.
Enterprises have asked SSC to consider approving share issuance plans soon in order to create the best conditions for enterprises to arrange sufficient capital for their projects, especially as the stock market has been recovering.
VNN
|
