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Companies late in plans for delisting
At least six enterprises have indicated a desire to delist shares since May, including Song Da Construction Company 27 (S27), Sai Gon – Quy Nhon Mining Corp (SQC), Sai Gon Telecom (SGT), Interfood (IFS), Vinaconex 11 (V11) and pharmaceutical company Mekophar (MKP). However, none of them have officially completed the procedure and their shares are still being traded on stock exchanges.
A source from S27 told the Dau tu Chung khoan (Securities Investment) newspaper that the company had hoped to attract more capital from the stock market. "However, the listing didn't fulfil our expectations, even though we have high demand for capital to finish our projects," the source said.
In addition, the company was subject to higher costs as a listed enterprise, and the liquidity of S27 shares was not improved after listing.
The company also cited the pressure of disclosure as another reason why the process came to a halt. "So we have decided to find other solutions for raising funds. Our shares will be listed again when our business gets better," the source said.
Other companies explained their plan to delist in an effort to "restructure to enhance operations". Recently, the Ha Noi Stock Exchange issued a warning about V11, as auditors doubted its capability to continue business.
The main shareholder of S27, accounting for a 37 per cent stake, agreed with the plan to delist. However, the final decision still depends on the opinions of other shareholders.
IFS suspended the delisting process with the HCM Stock Exchange because it was still discussing how to trade its shares after restructuring, the company said. It would probably buy back shares from investors to reduce the number of shareholders to just under 100. It would then operate under the Law of Enterprises instead of Securities Law.
Investor's benefits will be greatly affected if businesses announce delisting but do not follow through, as share prices often decline after companies change their business strategies.
Under current regulations, a company would be eligible to delist shares if 65 per cent of its shareholders agree. It would then have to hand in relevant documents to the stock exchange for approval.
vietnamnews
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