Hoa Phat holds annual shareholder meeting for 2017
Hoa Phat holds annual shareholder meeting for 2017
Hoa Phat Group (HPG) plans to issue an additional 250 million shares to raise capital for its strategic Hoa Phat Dung Quat iron and steel production complex project this year.
The minimum price of each share is VND10,000, the group’s chairman Tran Dinh Long announced at its 2017 annual shareholders’ meeting on Friday in Ha Noi.
The shares would be offered at the ratio of 5:1 (shareholders owning every five shares are able to buy a new one). The company expects to earn at least VND4 trillion through the issue.
The group received an investment licence for the construction of this project on February 6. It will be valid for 50 years and be part of a master plan on steel manufacturing and distribution until 2020, as approved by the Minister of Industry and Trade.
The project is devided into two stages with fixed capital requirement of VND40 trillion. In the first phase, it will produce one million tonnes of construction steel and one million tonnes of high-quality rolled steel, which will mobilise enough capital. The second phase is designed to produce two million tonnes of hot-rolled steel flat bar for machinery manufacturing. The company’s equity by the end of 2016 was nearly VND20 trillion, deducting VND 10 trillion for counterpart fund and VND10 trillion lending from Vietinbank.
Long also explained that the reason for issuing shares is because of business opportunities. He proposed to start the second stage of the project six months later after finishing two million tonnes of steel, instead of 18 months as mentioned in the licence. Then, by 2020, HPG can put into place a plan to increase revenue by 2.5 times.
To clarify about not sharing dividends in cash, director general of the company Tran Tuan Duong said that enterprises want to reinvest in major projects instead of splitting cash as per the shareholders’ desire.
"If you are looking at short-term goals, pay cash dividends, but if you want long-term, you have to reinvest in order to move forward. On the other hand, the group needs to increase its charter capital up to VND15 trillion," Duong said. It is certain that HPG will pay cash dividends in 2017 and 2018.
The chairman also reported results of operations in 2016 with the group’s revenue at VND33.9 trillion, and VND6.6 trillion after-tax profit. The plan for 2017 is to raise revenues from VND5 trillion to VND6 trillion based on the careful calculations and the potential result of the year’s beginning. Of this, the after-tax profit in the first two months of 2017 is VND1.2 trillion and it is confirmed to be no less than VND1.8 trillion by the end of the first quarter.
