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Merger to be discussed at shareholder's meeting: Haraco

Update: June, 09/2020 - 08:42

 

Passengers leave a North-South train operated by the Hanoi Railway Transport JSC. — VNA Photo

HÀ NỘI — Details on a plan to merge the Hanoi Railway Transport JSC (Haraco) and the southern Saigon Railway Transport JSC (Saratrans) will be discussed at Haraco shareholders meeting next week, according to a letter from its board of directors.

"In order to improve the company's business efficiency, details on a plan to merge Haraco and Saratrans will be discussed at Haraco's upcoming shareholder's meeting, set to take place on June 15,” the letter stated.

Haraco, Saratrans and the Transportation and Trade JSC - a freight train specialist - form the country's largest railway transport business, the Vietnam Railways (VNR). With Haraco and Saratrans holding a dominant market share on railway passenger transport.

The merging is part of a VNR's effort to restructure its business and investments. VNR aims to recall some of its capital by cutting down its share and maintaining a 51 per cent share in the three companies.

Haraco's main transport routes including the Hà Nội - Hải Phòng, Hà Nội - Ðồng Ðăng, Hà Nội - Lào Cai and the North-South. The company began its equitisation in 2015 with a registered capital of more than VNĐ800 billion (US$34 million). At the time VNR was its largest shareholder with 91 per cent. Haraco (HRT) has been registered on UPCoM since 2016.

Since equitisation - a process to convert a former State-own enterprise into a public company in Việt Nam - Haraco has reported large sales figures but with little to no profit to show for it. For instance, the company reported it net more than VNĐ2.5 trillion in 2019 but only a small profit-after-tax of VNĐ13.8 billion and a gross loss of VNĐ71 billion.

Last year, the company's sale target was set at more than VNĐ1.6 trillion with a projected loss of VNĐ355 billion. Haraco has made sizable investments in an effort to renew its fleet with the largest project to-date to build an additional  200 cars at a cost of over VNĐ550 billion.

Saratrans held its shareholder's meeting last month but made no note of the merger plans. — VNS

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