A Saigontourist taxi. The transport company has struggled due to inefficient business operations over the last five years. — Photo 24h.com.vn
HÀ NỘI — A shareholder at Saigontourist Transport JSC has filed for bankruptcy due to struggling business operations and an increase in expenses.
If approved, the company will become the third listed firm ever to file for bankruptcy after cement maker Beton 6 and Saigon Plastic Packaging JSC.
Major shareholder Nguyễn Văn Hồng, who has a 21.8 per cent stake in the company, said in the filing that Saigontourist Transport JSC had performed inefficiently in recent years.
Accumulative loss had exceeded the firm’s charter capital and it had been unable to repay debts, he said.
In response, the court requested the company to submit financial reports from the last three years and financial statements that clarify the situation.
In addition, the firm was asked to show the attempt it had made to resolve financial issues and the list of its assets and the locations of the assets.
A list of debtors and lenders must also be sent to the court, which contains all loans and guaranteed assets.
Saigontourist Transport was also required to provide its portfolio and asset valuations.
Under the Law on Bankruptcy, a shareholder or a group of shareholders owning more than 20 per cent stake for at least six months can file for the business bankruptcy.
Saigontourist Transport JSC was founded in 1976 and became a member of the HCM City Tourist Corporation ten years later.
In 1999, the company was put under the management of the Saigon Tourist Corporation (Saigontourist). The latter is no longer a shareholder.
In April 2004, the company turned into joint-stock company. In March 2009, Saigontourist Transport JSC doubled its charter capital to VNĐ80 billion (US$3.44 million).
The firm is well-known for its brand Saigontourist Taxi while it also focuses on driver training and education.
Saigontourist Transport JSC has made losses since 2015. The company in 2019 posted a loss of nearly VNĐ14 billion, raising its cumulative loss to VNĐ93 billion.
Losses were made because the firm was unable to pay the land lease tax worth VNĐ13 billion for its facility in Commune 2, Tân Bình District, HCM City. The tax is expected to increase by VNĐ2 billion by June 2020.
To resolve the problem, the company had planned to sell 1.6 million shares to shareholders in a bid to gain VNĐ16 billion. The entire sale revenue would be spent raising capital and paying the lease tax.
The proposal was rejected by shareholders at the annual meeting on May 23.
The company is targeting to post a loss of only VNĐ3 billion in 2020. Saigontourist Transport shares (UPCoM: STT) have stayed at VNĐ9,100 apiece since December 20, 2019. — VNS