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Quoc Cuong Gia Lai outlines share sale plans to tackle debts
Quoc Cuong Gia Lai Joint Stock Company (QCG) has unveiled plans to issue 150 million shares worth VND1.5 trillion (US$71.1 million) this year to help pay its debts, said chairwoman Nguyen Thi Nhu Loan.
Loan told a shareholder meeting on Sunday that the company needed to raise funds for on-going projects, including the Phuoc Kien residential development, Ben Van Don project and two hydropower plants.
In addition, the capital hike would help alleviate the company's interest payments, said Loan.
The real estate company is expected to raise a charter capital between VND1.3 trillion ($61.6 million) to VND2.8 trillion ($132.7 million).
Total debts have swollen to nearly VND1.24 trillion ($58.8 million), of which VND136.5 billion ($6.5 million) were convertible bonds from VinaCapital.
Loan said the company was in negotiations with lenders over converting the debts into shares at a rate of VND10,000 a share.
"The company doesn't necessarily issue shares worth up to VND1 trillion to pay lenders. If existing shareholders want to buy more shares, the company will negotiate with lenders to reduce the number of shares offered to them while increasing shares sold to shareholders," she said.
"However, I don't think there are many shareholders willing to pay VND10,000 to buy QCG shares at present," Loan admitted. QCG has recently traded at around VND9,000-10,000 a share.
Ending 2013, the real estate developer earned nearly VND973 billion ($46.1 million) in revenue and more than VND6 billion ($284,400) in after-tax profit. The company decided not to set up a provisional fund and will use the profit to cover losses from previous years.
QCG has set ambitious business targets for the year, with revenue increasing 150 per cent during last year to VND1.5 trillion ($71 million), while the pre-tax profit goal has been set at VND100 billion ($4.7 million), up 700 per cent from the previous year.
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