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TT Group to become Vinafood 2’s strategic partner

Update: February, 22/2018 - 07:00
Workers package rice at the Safoco’s plant under Vinafood2’s management in Hà Nội. — VNA/VNS Photo Vũ Sinh
Viet Nam News

HÀ NỘI — The industry-real estate-finance conglomerate T&T Group now has the highest chance to become the strategic partner of Việt Nam Southern Food Corporation (Vinafood 2), reported on Wednesday.

Vinafood 2 plans to offer 25 per cent of its charter capital, or 125 million shares, to the strategic investor after the company launches its initial public offering (IPO) on March 14.

As the price of shares offered to the strategic investor is expected to stay at least level to the IPO starting price of VNĐ10,100 (45 US cents) per share, T&T Group may have to pay at least VNĐ1.26 trillion ($56 million) to purchase those 125 million shares.

Vinafood 2 had only received the filed proposal from T&T Group by December 15, 2017, on which Vinafood 2 must finalise its equitisation plan and submit the plan to the Ministry of Agriculture and Rural Development, the business news website reported.

Local media had previously reported that T&T Group and the information-telecommunication-technology group FPT Corporation had expressed their interest in purchasing the strategic stake in Vinafood 2.

However, only T&T Group had filed legal documents on the deal while FPT Corporation had submitted its copies of required documents, thus, FPT Corporation had been disqualified from the race.

Therefore, Vinafood 2 had proposed the agriculture ministry approve T&T Group as its new strategic investor and submit the equitisation plan to the Prime Minister for approval.

According to the company’s equitisation plan, the strategic partner must be financially healthy so that it could help the firm restructure its financial system and is able to assist Vinafood 2 seek new markets and open new distribution channels in both domestic and overseas markets.

The strategic investor must meet some standards such as having operated in the agriculture sector for at least three years; having total assets of at least VNĐ10 trillion by December 31, 2015; and achieving net profits for three consecutive years and reaching a return-on-equity ratio of more than 5 per cent.

Under its equitisation plan, Vinafood 2 has a charter capital of VNĐ5 trillion with 51 per cent possessed by the State.

The company will sell nearly 23 per cent of its capital (114.8 million shares) at the IPO on March 14, offer 125 million shares to the strategic investor and the remainder to its employees and workers at a preferential price level.

Vinafood 2 operates in importing-exporting food, processed food, agricultural products and trade of those products, but it has been struggling with the current business model as the finance, production and market and product development policies have been implemented ineffectively. — VNS


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