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Race to acquire Kim Lien Tourism Company
Many big companies are bidding for shares of Kim Lien Tourism Joint Stock Company, the owner of historic Kim Lien Hotel, currently owned by the State Capital Investment Corporation (SCIC).
This is in stark contrast to the depressing results of the recent auctions when very few institutional investors showed their interest.
The State investment arm, SCIC will sell its entire stake of nearly 3.65 million shares in Kim Lien Tourism JSC, equivalent to 52.4 per cent of the company's charter capital. All of the shares will be offered in a whole lot sale, scheduled on December 22 on the Ha Noi Stock Exchange.
With the starting price of VND30,600 (US$1.37) a share, an investor must pay at least VND112 billion ($5 million) to own these shares.
"This is a relatively high price for a share of a small-d business," Hoang Thanh Tung, a securities analyst at the Royal Securities Company, said.
Even the price of the Airports Corporation of Viet Nam's initial public offering (IPO), the sole manager of all 22 airports in Viet Nam early this month, was set at only VND11,800 (53 cents) a share.
State-owned Kim Lien Tourism Company primarily operates in the field of restaurant and catering services. It has a charter capital of nearly VND69.6 billion ($3.1 million).
Its possession of the 55-year historic Kim Lien hotel at the prime location in Ha Noi centre was attributed to the attractiveness of this auction to many companies, Tung said. The 3.5ha hotel, opened in 1961, has two fronts onto the two crowded streets, Dao Duy Anh and Pham Ngoc Thach. It has nine buildings with 437 rooms and five restaurants.
This piece of land has been leased to the company from 1993 for a period of 50 years.
"As the shares are being sold as one lot it will allow investors to hold the controlling stakes in the company," Tung said.
As many as 10 companies have registered to chip in the auction, including big companies. State-owned Ha Noi Tourist Corporation is the largest bidder with a charter capital of over VND2.8 trillion ($125 million), followed by Refrigeration Electrical Engineering Corporation with a charter capital of VND2.7 trillion ($120.5 million); ThaiGroup, VND2.5 trillion ($111.6 million), and Mien Trung Construction Corporation, with nearly VND2.1 trillion ($93.8 million).
In 2014, Kim Lien Tourism JSC earned VND127 billion ($5.67 million) in revenue and VND13.5 billion ($603,621) in after-tax profits.
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