Giants leave stock market
Huge investment costs, mistakes in development strategy, difficulties in consumption as well as market were some of the main reasons resulting in the shutdown and dissolution of many listed enterprises in the stock market.
Unexpected dissolution
On August 24, 2012, as planned, Saigon Beverages Joint Stock Co (Tribeco – coded TRI) will hold a shareholders’ meeting to discuss TRI’s dissolution plan. Although the company will have to wait for approval from the shareholders, looking at the ratio of 68 percent stake in TRI held by members of the director board and 87 percent stake held by majority shareholders, the dissolution of TRI is a mere formality.
This was a big surprise for many investors because a few months ago, in its voluntary listing cancellation plan, TRI’s leader still mentioned about moving floor from Hochiminh Stock Exchange (STC) to Unlisted Public Company Market (UpCoM). In addition, the resolution of the company’s annual general meeting (AGM) in 2012 also showed together with building business targets in 2012, TRI also submitted shareholders to add more business lines this year. With this intention, it is unbelievable that TRI surprisingly plans to convene an extraordinary shareholders meeting to discuss on its dissolution issue. This problem can only be explained clearly and exactly by TRI’s managers.
Meanwhile, the matter of Sai Gon Cable Joint Stock Corp (coded CSG) is different from TRI’s because, CSG’s dissolution plan has been raised since the end of 2011 by its biggest shareholder namely Sacom Development and Investment Corp (coded SAM). However, in its AGM in 2012, SAM’s plan did not reach a needful consensus rate. Then, in the extraordinary shareholders’ meeting, both two plans of dissolution and capital reduction were approved by shareholders. CSG said that it would choose the capital reduction plan to restructure operations. But finally, in the latest resolution of the company’s director board (on August 1, 2012), CSG decided to choose a dissolution plan.
Foreseen deaths
TRI have ever been the first listed shares of the stock market and if looking TRI at the time of before suffering losses (before 2008), many investors have pity on TRI’s dissolution. TRI has a lifespan of over 20 years. At the time of before cooperating with its strategic partners namely Kinh Do Corp (coded KDC in 2005) and Uni-President (in 2007), TRI had received many achievements such as taking the leading position in domestic soft drink market, reaching production capacity at 30 million litres per year (1994). In 2001, by launching many products such as soya milk, TRI regained its market share from weighty rivals like Coca-Cola and Pepsi. Till 2007, TRI’s products still gained favour when continuously being selected as Vietnam’s high quality goods.
In the 2005-2007 period, together with hiking chartered capital and opening more room for partners when giving the dominant holding ratio for KDC (holding a 23.43 percent stake) and UniPresident (with a 29.19 percent stake), TRI established two subsidiaries namely Tribeco Binh Duong and Tribeco Mien Bac (in the North) with chartered capital of 50 billion dong each with 80 percent contributed by TRI. TRI expected with the supports of “giants” in the food sector together with new capacity of two factories, TRI would increase its competitiveness and achieve spectacular growth rate.
Contrary to the calculation of TRI, from the fourth quarter of 2008, TRI incurred constant losses. Till the end of 2011, TRI has suffered losses for 12/13 quarters. Even in the single quarter of gaining profit, according to the fiscal statement in the second quarter of 2010, TRI gained profit thanks to transfer its shares in Tribeco Binh Duong and Tribeco Mien Bac. In 2012, TRI estimated to suffer loss of nearly 140 billion dong.
According to TRI’s explanation, the reasons for its losses were attributable to huge investment costs, higher loan costs, increasing costs of sale and management while its revenue did not increase. But most of all, TRI’s wrong strategies accompanied with failures in market expansion have led to TRI’s dissolution.
With CSG, the situation was not serious enough to be dissolved because CSG still earned profit and big amount of cash. Sometime, CSG was named one of the “riches” on the stock market with the amount of cash at nearly 300 billion dong. But, Do Van Trac, vice president of SAM cum chair of CSG’s director board said that CSG’s road ahead is still an impasse because communication cable field is in a difficult period, CSG’s trade name and market share in electrical cable segment still remain very weak. Trac also confirmed: “making dissolution when CSG’s assets value at high will benefit shareholders” and estimated SAM will earn over 120.4 billion dong from CSG’s dissolution.
Category: Stocks
