TTC Land finalises 30 per cent charter capital hike
TTC Land finalises 30 per cent charter capital hike
Sacomreal JSC—the real estate arm of Ho Chi Minh City-based commercial lender Sacombank, now TTC Land—has just announced the results of its share distribution to raise its charter capital by 30 per cent.
Accordingly, approximately 73.2 million shares were distributed, 24.3 million of which were sold to the company (SCR)’s existing shareholders. 24.4 million shares were sold through private placements and 24.5 million to the public. The company earned a total of VND732 billion ($32.5 million) in proceeds.
Stock registration ran from April 24 to May 31, 2018 during a downturn on the local stock market.
The Vietnamese stock market was touted as one of fastest growing markets worldwide with a 19 per cent hike in the first quarter of this year. The situation was turned around in the first two months of the second quarter when the VN Index fell by 16.9 per cent. This had a marked impact on the SCR ticker.
Significantly, TTC Land earned approximately VND489 billion ($21.7 million) in proceeds from selling to its existing major shareholder, Thanh Thanh Cong Invest JSC, at a price higher than SCR’s current market price, attesting to the shareholder’s trust in TTC Land’s inner strength and bright growth perspective.
As for the proceeds gained from the share distribution, TTC Land will focus on carrying out mergers and acquisitions (M&A) to boost its land fund. The company is set to buy further land plots covering 5,077 square metres in Ho Chi Minh City's District 5 to develop hi-end condo complexes and trade centres.
In addition, TTC Land will use part of the proceeds for finance restructuring to enhance its inner strength for project development.
In light of the company’s approved M&A roadmap, TTC Land will expand into developing new sorts of products, including industrial real estate, logistics real estate, resort properties, as well as diversifying other real estate services.
The company envisages focusing on the medium to high-end customer segments with an enriched portfolio going from low-rise to high-rise residential complexes. Under its five-year development strategy, TTC Land expects to earn nearly VND9 trillion ($400 million) in total revenue, of which the residential real estate segment will contribute 40 per cent, industrial real estate 25 per cent, hospitality real estate 20 per cent, while the rest will come from trade centres, office buildings, and logistics real estate.
About 34 per cent of the land fund will be located in Ho Chi Minh City (nearly 30 per cent in downtown areas), and other developments will target major locations nationwide, such as Haiphong city, Tay Ninh, Long An, and Phu Quoc.
With such potential, the management of Thanh Thanh Cong Invest JSC and TTC Land have faith that the SCR ticker will rebound along with the stock market. To diversify revenue streams, TTC Land has to boost charter capital to spend on M&A activities.
The prospective product segments TTC Land is set to develop in the upcoming time all feature bright development prospects so the current stock dilution pressure is only momentary and would not affect shareholder benefits.
Thanh Thanh Cong Invest JSC’s buying a large part of the shares TTC Land recently sold helps the latter to secure cashflows to conduct M&As in the upcoming time without the need to borrow from banks.
After the recent successful share distribution, TTC Land’s charter capital rose to VND3.170 trillion ($140.8 million).
By the end of May 2018, TTC Land launched nine projects in the market, with 3,740 housing units already handed over, accounting for 34 per cent of the project portfolio. Most of the projects are at favourable locations, such as the eastern zone (Thu Duc district), the southern zone (District 7), and the western zone (District 10, Tan Binh, and Tan Phu districts).
Throughout 2018 alone, TTC Land plans to roll out six projects with more than 3,000 units in districts 4 and 7, Phu Nhuan, and Tan Phu, as well as surrounding locations.
Besides, the company strives to hand over three projects in the southern zone (District 7) and western zone (Tan Phu district) with around 1,750 housing units. The target is to score VND2.075 trillion ($92 million) in revenue and VND249 billion ($11 million) in after-tax profit this year.
