Steel producer Hoa Sen Group (HSG) has sold nearly 12 million shares at a price of 45,000 dong (US$2.40) to three domestic and foreign financial institutions: South Korea's STIC Investment Inc, FPT Securities Co and Bong Sen Fund Management Co.
The share sale has allowed the HCM City-listed Hoa Sen to raise capital of 538 billion dong ($28 million) and made Hoa Sen the first Vietnamese enterprise in which STIC has invested following nearly two years of market research, according to Kevin Lim, general director of STIC, which made a $10 million investment in the group.
"STIC chose Hoa Sen Group for two reasons," said Kim. "First, it is the business leadership of the company's chair, Le Phuoc Vu. And second, the company's management system and employee competence attracted us. "
Vii confirmed that the strategic cooperation marked a new stage in the development of Hoa Sen and would help it achieve a target of $1 billion in annual revenue and $100 million annual profit.
Capital raised from the sale of Hoa Sen shares would be used in building the Ton Hoa Sen Phil My Factory, which would produce up to a million tonnes of zinc-coated and cool-rolled steel per year once completed, Vu said.
The factory, which began construction in May of last year, was projected for completion in 2013 at a total cost of over 2.3 trillion dong ($121 million). But products from the first phase would be on the market next month.
Hoa Sen has also recently signed financing agreements on the project worth 450 billion dong ($23.7 million) with a consortium of banks including Vietcombank and Eximbank.
Hoa Sen Group, established in 2001, currently has charter capital of 570 billion dong ($30 million). Last year, the group earned 2.85 trillion dong ($149 million) and posted a net profit of 189 billion dong ($10 million). This year, it has targeted a much higher five trillion dong ($262 million) in revenue and 520 billion dong ($27.2 million) in profit.
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