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Plastics firm hits record low on market
Viky Plastics Co (VKP) fell to a price of just VND600 (US$0.03) per share yesterday – an incredible low in the history of Viet Nam's stock market for a stock that is otherwise eligible for listing on the HCMC Stock Exchange.
VKP, which has been on the verge of insovlency, has traded at around VND1,000 for the past three months, and, if the downtrend continues, the stock could become waste paper by next week, with over 2,000 shareholders losing their investment in the company.
The third quarter was the 10th consecutive quarter in which VKP incurred losses, with total accrued losses amounting to nearly VND117 billion ($5.6 million). The company's equity has fallen from an initial VND80 billion ($3.8 million) to just VND34.4 billion ($1.6 million).
With total assets of VND268.6 billion ($12.8 million) as of September 30, cash-on-hand totalled only VND1.4 billion ($66,700) with the rest in accounts receivable, inventories and fixed assets (land and equipment).
Meanwhile, the company faces monthly interest payments of over VND2 billion ($95,200) and has received repeated auditor warnings about ambiguous items in its financial reports.
Luu Tien Dung, a lawyer with the Vietnamese law firm YKVN, said there were two scenarios for the company's bankruptcy: VKP's board of directors could declare bankruptcy, or its creditors could filed with a court, claiming that VKP was unable to pay its debts and seeking to force the company into involuntary bankruptcy.
The head of the HCMC Stock Exchange's Listing Management and Appraisal Department, Tran Anh Dao, said the exchange was discussing what to do about VKP shares and would make an announcement when a specific plan had been determined.
VKP's troubles were not only a loss to VKP shareholders but also created a negative image in the eyes of investors about shares listed on the stock exchange.
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