Investors over-subscribe for Vinafood II IPO
A total of 41 investors registered to purchase 115.6 million shares at Vietnam Southern Food Corporation (Vinafood II) in the upcoming initial public offering (IPO), slightly exceeding the 114.8 million put on offer, announced the Ho Chi Minh City Stock Exchange (HSX).
Vinafood II's IPO is schedule to be held on March 14 at HSX with the starting price of VND10,100 (US$0.44) apiece, resulting in a potential revenue of VND1.1 trillion (US$51 million).
Vinafood II's IPO is schedule to be held on March 14.
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Currently, Vinafood II's charter capital is VND5 trillion (US$220.51 million), equivalent to 500 million shares with the unit value of VND10,100 (US$0.44). Under the current plan, the government holds 255 million shares, representing 51% of its charter capital. The Ministry of Agriculture and Rural Development will be represent state ownership in the company after the equitization.
According the equitization plan approved by Deputy Minister Vuong Dinh Hue, the number of shares auctioned to ordinary investors is 114.8 million, accounting for 22.97% of the company's charter capital.
Vinafood II expects to offload 125 million shares to strategic investors, representing a quarter of Vinafood II's charter capital. In late February, T&T Group has become the sole investor registering to be strategic investor of Vinafood II. Consequently, the group is expected to part with VND1.2 trillion (US$52.8 million) for this deal.
Based on a report released by Vinafood II, the company has been facing difficulties in business activities in recent times. Specifically, revenue in 2015 was recorded at VND22.7 trillion (US$1 billion), which is lower than the 2016 revenue of VND26.3 trillion(US$1.1 billion).
Also in 2015, Vinafood II reported a loss of VND9 billion (US$396.000), taking the accumulated losses to VND1.06 trillion (US$46 million), while in 2013 and 2014 the company suffered losses of VND268 billion (US$11.8 million) and VND907 billion (US$39 million), respectively.
Vinafood II set the objective of reaching VND11.9 trillion (US$524.8 million) in revenue and VND118 billion (US$5.2) in after-tax profit, respectively, after the equitization.
Vinafood II is specialized in trade, food import and export, processed food, agricultural products, and storage. The company currently owns a distribution system connecting the southern provinces of Vietnam.
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