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Bianfishco’s savior also in financial constraints
The construction firm 584 Group that has announced to pump VND500 billion for the debt-beleaguered Bianfishcocurrently has a VND1.93 trillion liabilities, around 78 percent of its total assets.
Tran Kim Minh, CEO of the Transport Engineering Construction and Business Investment Stock Company 584, better known as NTB for its securities code, has decided to invest the money as liquid capital to help Bianfishco stabilize its production.
Of this, 30 percent is funded by NTB working capital, while the rest is borrowings from the Bank for Investment and Development of Vietnam (BIDV).
The Ho Chi Minh City-based construction firm has some VND600 million in cash by the end of Q1/2012, according to its quarterly financial statements.
This firm has seen a positive profit rate in the first three months of this year after losing nearly a billion in 2011, said the statements.
On the separate financial statements, the parent company had a profit of VND500 million in the first quarter.
Earlier, NTB reported its net profit from the core business was a negative of over VND31 billion in consolidated financial statements in 2011.
Because differences from revaluation of land use rights and other incomes, valued more than VND120 billion, NTB’s losses are estimated under VND1 billion in 2011.
Currently, among the company’s total debts, some VND1.152 trillion are long-term borrowings, while VND778 billion short-term debts, an increase of 50 billion over last year.
According to notes found in the Q1/2012 financial reports, current short-term debts of NTB at BIDV and Southern Bank were VND59 billion and VND106 billion, respectively.
Among the long-term debts, it owes some VND87 billion to Nam A Bank and VND515 billion to Agribank.
NTB refused to pay 2010 dividends in cash for 3 times and eventually announced to pay in shares with a rate of 10.5 percent.
NTB-coded stock got a warning on February 24, 2012, and the company recently had to pay a VND70 million penalty for late submission of 2011 financial report.
From May 2011, NTB shares are trading below par value, sometimes at less than VND4,000 per share.
However, in the recent 12 sessions, the company stock has yet seen any serious price fall and for 8 sessions was traded at the ceiling price. It closed the Friday session at VND7,500 per share, down VND300 day on day.
NTB CEO Tran Kim Minh told newswire VnExpress said: "The company has received some money when doing business with foreign partners through investment in agricultural products and home decoration.”
“It is expected, before May 20, we will inject over VND100 billion, the rest will come later after we mortgage our assets at banks for more loans."
At a recent press conference, Minh said the decision to invest in Bianfishco is due to the difficulties in the construction sector, and the firm wants to divert and find new channels for investment.
During a recent business trip to the U.S., Minh met Bianfishco’s former CEO Pham Thi Dieu Hien in Fountain Valley, California and knew that the firm had signed a contract with Cosco, a US wholesale stores, for 1,000 containers of fillet catfish worth $100 million.
With his expertise working in the fishery sector in the past, Minh recognized it was a good opportunity to direct his investment into the sector.
Returning to Vietnam, after the meeting of NTB board, Minh made the decision to invest in Bianfishco.
In its restructuring plan and preparing for the upcoming shareholders meeting, Bianfishco is expected to sell 30 percent stake to NTB.
This year, NTB targets to reach VND584 billion revenue and post-tax profit of VND50.4 billion
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