HAGL eyes profitable sectors
|The company has competitive advantages in rubber and sugarcane – like large land areas, favourable locations, and mechanisation of farming that bring down costs. —Photo cafebiz
HCM CITY(VNS) — Hoang Anh Gia Lai has been selling a number of its less profitable ventures as part of a restructure plan which will see the HCM Stock Exchange-listed firm focus on more profitable sectors.
Its chairman, Doan Nguyen Duc, said: "We will concentrate on rubber and sugarcane farming and sugar production," he told shareholders in HCM City on Monday.
The company has competitive advantages in rubber and sugarcane – like large land areas, favourable locations, and mechanisation of farming that bring down costs – he said.
Property would also be a core business with an ongoing project in Myanmar being the key one, he said.
The Hoang Anh Myanmar Complex Project will have a total land area of over 7.3ha and floor space of 600,000sq.m.
The complex containing a five-star hotel, shopping mall, office space, and apartments is expected to cost US$440 million when it is finished at the end of 2014.
Sales of the apartments and shopping space will begin earlier. With the Myanmar market still short of such high-end properties, the project is expected to yield high profits especially since the land was acquired at a low price of $700 per square meter, according to Duc.
In June the company sold all six hydro-power projects in Viet Nam for VND2.1 trillion ($100 million).
The Hoang Anh House Development Company, an affiliate of HAG, will sell its stakes (worth VND3.334 trillion, or $159 million) in 13 projects in HCM City to another affiliate, An Phu Company.
The land for these projects are all "clean" and had been bought at low prices, Duc said.
The sales process will begin this month with the hiring of a consulting firm.
Shares of An Phu (with chartered capital of VND360 billion) will then be sold at par (VND10,000).
HAGL's mining, wood and stone projects will also be sold off. The company's outstanding loans totalled over VND16 trillion at the end of 2012, but came down to VND14.6 trillion by June end.
It plans to lower the amount to VND10 trillion by this year's end.
Its owners' equity is expected to rise to VND13 trillion by year end, up from less than VND10 trillion at the end of 2012. — VNS