First licensed share refuses to be listed
Tay Ninh Cable Car Tour Co (CarTour) decided not to list its shares on the stock market after it has received a license by the State Securities Commission (SSC), said Le Huu Phuoc, CarTour director on December 14.
Phuoc said the State Securities Commission, the market watchdog, issued the licence on September 21 for the company to list 1.59 million shares, with face value of 10,000 dong which represents its registered capital of 15.9 billion dong (US$1.01 million). However, this plan could not come on stream but an application to ask for cancellation by the company.
The major cause resulting in the situation is that CarTour said that it might face difficulties related to the ownership capital rate of shareholders.
Tay Ninh Tourist Co is the legal shareholder that obtains the lion’s shares in CarTour with the rate of 51% of total chartered capital.
CarTour is used to belong to Tay Ninh Tourist Co so when equitising CarTour, Tay Ninh Tourist Co had the authorisation to hold the lion’s shares to represent for the state in CarTour.
Tay Ninh Tourist Co has set up a plan to change the ownership form. “There is a need to have a change in Tay Ninh Tourist Co’s ownership capital rate in CarTour, so we will have to temporarily cancel the listing of shares on the stock market,” said Phuoc.
Phuoc said Tay Ninh Tourist Co will be turned into a joint stock company and shareholders of Tay Ninh Tourist Co will not be a state enterprise or one member liability limited company (100% state capital) as planned.
According to Phuoc, the thing is drawing a great deal of concern of Tay Ninh Tourist Co is withdraw capital when it is not a SOE, which will cause a disorder in the ownership capital contribution rate in the company.
However, this reason of CarTour does not persuade the SSC. Moreover, according to the SSC, at present, in Vietnam, there is no regulation on cancelling listing to shares that have received licenses.
Instead, the licensed shares must go on bourse within 30 days after receiving license. Accordingly, CarTour’s license will expire in the next seven days. It means that as of December 21, CarTour’s share will be stopped listing.
On December 13, the SSC once again reminds and warns CarTour of the time of going on bourse.
Phuoc said that CarTour is waiting for Tay Ninh Tourist Co to complete procedures to transfer the ownership form. After that, CarTour will make procedures to list its shares on the stock market.
To date, the Vietnamese stock market has had 25 listed shares that are being traded. The tiny market now has total capitalisation of 3.56 trillion dong (US$227 million) after 4 years in operation. CarTour is the first share that refuses to be listed after receiving a license by the SSC.
At present, CarTour’s share price traded on the informal market has doubled or half-doubled its par.
Cartour, based in the southern province of Tay Ninh bordering Cambodia, provides cable car services to a famous pagoda on Nui Ba Mountain.
CarTour’s revenue has increased from 15.6 billion dong in 2002 to 20.5 billion dong in 2003. Its pre-tax profit has increased from five billion dong in 2002 to six billion dong in 2003. Cartour has targeted its net profit this year to rise to 6.4 billion dong from 5.86 billion dong earned last year when it paid a dividend of 20% of its share’s face value.
