|
The bond issuance plans that raise doubts
In the context of the gloomy stock market, a lot of listed companies have drawn up surprising plans to issue corporate bonds, which raise doubts about their feasibility.
In late November 2011, the board of directors of the Hoang Quan Consultancy, Trade and Real Estate Service Corporation HQC approved a resolution on issuing convertible bonds, which means the bonds which will become the company shares after a certain period.
Under the plan, HQC planed to issue 200 billion dong worth of convertible bonds with the face value of 1 billion dong per bond. Bond holders can choose either to convert into shares or not. The bonds would come matured after one year.
Regarding the interest rate, HQC planned to pay the interest rate which is calculated by the 12-month term deposit interest rate plus 3 percent per annum.
As such, the interest rates bond holders can enjoy in case they do not want to convert in to shares would be just a bit higher (3 percent per annum) than the deposit interest rate. This proves to be a modest interest rate if noting that bond holders have to bear higher risks.
Especially, the price to convert bonds into shares would be no less than 14,500 dong per share, which is 2.5 times higher than the current market price.
Commenting about the interest rate and the price, analysts said that even if the stock market would be better than now in one more year, they do not think that HQC price would soar to 15,000-16,000 dong per share from the current 5000-7000 dong per share. Therefore, the analysts say they cannot understand the bond issuance plan of HQC.
According to Hoang Thach Lan, Director of MHBS Securities Company, the bond issuance plan of HQC would be feasible only if HQC had found the partners who bought bonds already, or HQC’s leaders have some reasons to believe that their shares would increase to 14,500 dong per share just after one year.
Meanwhile, Lan said, he still cannot see any good points that can attract the attention of investors to HQC shares.
Many other securities issuance plans by other companies have also raised doubts about their feasibility. In 2010, some enterprises such as CCM and LCG, who anticipated that they would not succeed with securities issuance plans, decided to cancel the issuance plans.
The narrow doors
The fall of the stock market has not only made it impossible for enterprises to issue shares, but also made it difficult to seek capital through the bond issuance channel. The current difficulties, according to experts, require securities issuers to take wise moves and have reasonable plans.
A lot of companies that issue convertible bonds in 2011 chose the way of issuing securities separately and allow bond holders to make choices on whether to convert the bonds into shares.
The Thang Long Investment Group (TIG), for example, when issuing 150 billion dong worth of bonds in March 2011, offers the buyers the right to either choose bonds into shares or not, or just convert a part of their bonds.
“The offer can make securities more attractive in the eyes of investors,” said Trinh Hoai Giang, Deputy General Director of HSC Securities Company
However, in order to succeed in bond issuance, enterprises need to pay attention to two factors, the bond interest rates and the prices of shares. The interest rates to be paid to bond holders need to be competitive in comparison with bank deposit interest rates to attract buyers, i.e. that the interest rates to be paid in case bond holders do not convert into shares should be higher than 18 percent per annum.
However, in reality, very few enterprises dare to offer such high interest rates. Therefore, bonds really do not attract investors.
vietnamnet
|
