Many large companies are seeking capital through issuing additional shares in an effort to overcome difficulties in accessing bank loans or to finance dividend payouts.
Food processor Masan Group (MSN), one of the top 10 companies by market capitalisation and liquidity on the HCM City Stock Exchange, approved a private issue early this week of up to 310 million shares at a price of no less than the par value of VND10,000 per share.
TSTC shares, expected to be issued in the latter half of this year or in the first quarter of next year, will be targeted to domestic and foreign strategic investors who are capable of contributing to the company’s operations.
Of 310 million shares, 110 million shares will be issued to raise cash for operations and to complete merger and acquisation deals, while money raised from the remaining 200 million shares will be used to settle debts.
By the end of the first quarter of this year, MSN had posted earnings of VND1.5 trillion ($73 million), up 16 per cent over the same period last year, but its profits were down 1.5 per cent to just VND559 billion ($26.6 million) due to higher costs.
MSN shares are currently being traded at around VND100,000 per share.
Another of the top 10 largest shares on the HCM City exchange, property developer Hoang Anh Gia Lai Co (HAG) will also list over 70 million shares on June 4, worth an estimated VND700 billion ($33.3 million). The funds raised will be used to cover dividends on 2010 profits.
HAG reported its first-quarter revenue increased 21 per cent year-on-year to VND870 billion ($41.4 million), but due to the rising costs of sales and debt servicing, its net profit declined 83 per cent to just VND77 billion ($3.7 million).
HAG closed yesterday unchanged at VND27,300 per share.
Another major real estate developer, Tan Tao Investment Industry Co (ITA), has also decided to list nearly 102.6 million shares worth over VND1 trillion ($48.8 million) on June 5. The funds raised would also be used to finance its 2010 dividend payout.
ITA shares declined by 1.3 per cent yesterday to end the session at VND7,600 per share.