HÀ NỘI – Vinafood 1 Flour One Member Company Limited, a member of state-owned Vietnam Northern Food Corporation (Vinafood 1), will auction over 8.2 million shares, equivalent to a 34 per cent stake.

The auction on the Hà Nội Stock Exchange will take place on October 28 and the starting price is set at VNĐ10,000 (US$0.45) per share. The deadline for participation in the event is October 26.

Foreign investors are allowed to buy all the shares put up for sale.

The precursor of Vinafood 1 Flour One Member Company Limited was Hưng Quang Flour Production, a unit of Nghê An Food Company. In 2008, the flour mill company was established under the management of Vinafood 1.

The company produces and processes food, flour and related products and trades food materials and cattle feed. It has two flour production factories - Hưng Quang Flour Factory in Vinh City, central Nghệ An Province, and Bảo Phước Flour Factory at the Đình Vũ Industrial Park in northern Hải Phòng City.

The flourmill firm expects its charter capital to reach VNĐ242 billion (nearly $11 million) after equitisation, of which the state will hold 65 per cent of capital, employees will hold 0.99 per cent and other investors 34 per cent.

Due to fierce competition in the local wheat market and volatile prices of input materials, business results of the company declined during the 2013-15 period.

Its net profit decreased from VNĐ6 billion in 2013 to just nearly VNĐ143 million in 2014. It even incurred losses of VNĐ2.6 billion in 2015.

The company’s performance improved in the first half of this year with total revenue of VNĐ252.4 billion and net profit of VNĐ894 million. Until the end of June 2016, its total assets value was VNĐ316 billion.

It expects to earn over VNĐ1 billion in net profits for the whole of 2016 and nearly VNĐ6.8 billion in 2017. The company targets paying 2 per cent dividend from next year, with the rate increasing to 2.2 per cent in 2018 and 2.4 per cent in 2019. – VNS