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PetroVietnam Fertilizer shareholders vote no to plant purchase
Shareholders rejected a proposal by PetroVietnam Fertilizer and Chemical Co. to buy a US$990 million fertilizer plant at their annual general meeting last week.
Chief executive Phan Dinh Duc told Bloomberg on Tuesday that shareholders had voted against buying the Ca Mau Fertilizer Plant.
State-owned PetroVietnam Group, which has a 63 percent stake in the PetroVietnam Fertilizer and Chemical, wasn’t allowed to vote since it owns the plant in question.
The rejection came after many shareholders complained that they knew too little about the proposed acquisition as they only had two printed pages on which to base an informed decision.
Others were worried that the purchase would raise the value of PetroVietnam Fertilizer and Chemical’s assets above VND20 trillion ($1.13 billion), more than four times the company’s present market capitalization of VN4.9 trillion.
PetroVietnam Fertilizer and Chemical shares rose for the third day straight at the Ho Chi Minh Stock Exchange Thursday, increasing 4.8 percent to VND32,500, the highest since February 2.
“Investors now have more confidence in the company’s performance this year as it will not be distracted from its current business by spending a lot of money on a new plant,” Bloomberg quoted Khong Van Minh, investment director of Jaccar Capital Fund, as saying Thursday.
The stock also rose on expectations of fertilizer price increases following recent gains in crude oil prices, Bloomberg said, citing Minh again.
Oil for May delivery rose 60 cents, or 1.1 percent, to $53.37 a barrel at the New York Mercantile Exchange. Oil prices are up 19 percent this year.
Also at the AGM, the fertilizer maker announced it had set an after-tax profit target of VND990 billion for 2009, 28 percent lower than last year’s VND1.38 trillion.
It also said PetroVietnam Group would cut its stake to 51 percent this year.
The company, Vietnam’s third-biggest by market value, has put off its planned listing on the Singapore Stock Exchange this year because of the “unfavorable global economic conditions,” CEO Duc told Bloomberg on March 18.
Dau Tu Chung Khoan
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