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State to retain controlling share after equitising Song Da Corporation
The state will hold a 51 per cent stake in domestic construction firm and materials producer Song Da Corporation after its equitisation, which it will reduce to 36 per cent by 2020.
This schedule was included in the equitisation plan designed for Song Da Corporation by the Ministry of Construction, along with criteria to choose strategic investors. The plan is awaiting the prime ministerial approval, according to newswire Vneconomy.vn.
Accordingly, Song Da Corporation will issue 450 million shares, equalling an 18.82 per cent stake, at the initial price of VND10,000 ($0.45) per unit.
The corporation expects to acquire VND2.89 trillion ($129.7 million) in revenue and VND160 billion ($7.2 million) in pre-tax profit in 2016 after the sales.
Previously, Song Da Corporation planned to launch its initial public offering (IPO) in July 2016, but was forced to delay by circumstances.
Regarding the strategic investors, the criteria stipulate that candidates have to register to buy at least 5 per cent of the 30 per cent stake set aside for strategic investors. In addition, aspiring investors must have experience and capacity in the sectors of electricity, construction, and real estate. It is particularly important for candidates to have a total asset value of at least VND1 trillion ($44.9 million) as of 2015 and an equity of VND300 billion ($13.5 million). In addition, candidates must operate with profit and without bad debts.
The equitisation of the corporation will occur in the context of its massive losses. Notably, according to the company’s financial report, its debts of VND10.2 trillion ($457.6 million) far outweighed its equity of VND2.6 trillion ($116.7 million) at the end of 2015.
Earlier in August, Song Da Corporation reportedly sold its entire 53.04 per cent holding, equalling 26.1 million shares, in Vietnam-Italy Steel Company (VIS).
The VIS shares were traded at VND12,800 ($0.57) apiece, bringing the transaction value over VND334 billion ($14.85 million).
Since November 2015 Song Da Corporation had registered three times to sell its entire holding in VIS, but transactions were not successful as the payment of the steel producer's share prices were not high enough.
Established in 1961, Song Da Corporation specialises in developing thermal power plants, traffic infrastructure, industrial factories, and real estate projects as well as manufacturing construction materials.
It is the major contractor of almost all thermal power plants in Vietnam, including Son La, Hoa Binh, Lai Chau, among other. Besides, it expanded operations to Laos through developing Xekaman 1 and 3 thermal power plants.
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