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VietNamNews

Firms warned of difficulties in issuing shares

Update: September, 25/2017 - 09:52
In October Đông Hải Bến Tre Joint Stock Company (DHC) will issue nearly nine million shares to raise VNĐ130 billion (US$5.73 million). — Photo cafef.vn

In October Đông Hải Bến Tre Joint Stock Company (DHC) will issue nearly nine million shares to raise VNĐ130 billion (US$5.73 million).

It will issue 5.2 million of the shares to existing shareholders at a price of VNĐ18,000. The money raised through the issuance will be used for the second phase of the Giao Long Paper Plant.

DHC will also issue 1.2 million shares under the employee stock ownership plan (ESOP) and 2.6 million shares will be issued to mobilise capital for paying dividends.

The HCMC Infrastructure Investment Joint Stock Company (CII) recently held an extraordinary general meeting to get shareholders’ approval for selling more than 123 million shares to existing shareholders at par in the fourth quarter of this year. The company expects to raise VNĐ1.23 trillion ($54.23 million) through the exercise.

The meeting also approved a proposal to sell 17.7 million shares to Rhinos Asset Management Fund at a price of VNĐ24,490 per share to raise an estimated VNĐ434 billion.

CII needs large sums of money for several build-operation-transfer projects it has lined up, like the Hà Nội Express Way, 152 Điện Biên Phủ Express Way and projects in the Thủ Thiêm New Urban Area in HCM City.

Analysts said the economy was showing signs of recovery in addition to positive moves by the stock market this year, which was encouraging many enterprises to hit the market to mobilise funds.

They said the stock market had been one of the most popular avenues for enterprises to raise capital in recent years, but it was not really working any longer.

They routinely faced difficulties with rights issues, and after failing to persuade existing shareholders to subscribe, offered the shares to strategic partners. But that had not been proving easy either due to various reasons.

Some enterprises tried to issue shares to debtors to convert their debt into equity, but faced the same problem as with rights issues. VNS

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