Vinacomin plans corporate bond issue
Vinacomin plans corporate bond issue
The debt-laden Viet Nam National Coal and Mineral Industries Group, or Vinacomin, is planning a big bond issue this year, reported the newspaper Dau tu Chung khoan (Securities Investment).
The issue, if carried out this year, will be the second biggest corporate bond issue behind the VND7.6 trillion (US$362 million) deal conducted by Viet Nam Infrastructure and Property Development Group in April.
Last week, Vinacomin selected Vietcombank Securities and VP Securities to be its advisory on the deal.
The group is now preparing to set up a contract, identify the issuance volume, prepare documents and determine the interest rate, Vinacomin announced on its website.
The specific volume has not been disclosed but is forecast to be VND3 trillion ($143 million).
In the middle of last year, Vinacomin also put up VND3 trillion worth of bonds for sale but only successfully sold VND500 billion ($23.8 million). The group sold the remaining VND2.5 trillion ($119 million) worth of bonds in the first quarter of this year.
This year's issue is forecast to face many difficulties, especially since the group's business results are not good.
Vinacomin's 2012 profit declined 60 per cent from the previous year to VND2.6 trillion ($123.8 million) due to soaring cost. Liabilities as of 31 December, 2012 was VND81.85 trillion ($3.9 billion) compared to its total equity of just VND32.8 trillion ($1.56 billion).
The Ministry of Finance decided to raise the export tax for coal from 10 per cent to 13 per cent on July 7 this year, forcing the group to increase the price of coal.
Vinacomin reported July sales of over 2 million tonnes of coal in both domestic and overseas markets, 60 per cent lower than the monthly average in the first half of this year.
The group has recently asked to decrease the export tax to the old level of 10 per cent due to low global prices.
According to some analysts, Vinacomin's bond issue can attract some investors such as banks. Demand for "safe" bonds, especially issued by State-owned enterprises, have increased since the beginning of this year along with banks' capital abundance.
Total credit growth reached only 4.5 per cent by June's end, far below the yearly target of 12 per cent. At some major banks like Vietcombank, credit growth was even negative.
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