Mai Linh taxi group plans share issue
Mai Linh taxi group plans share issue
Taxi operator Mai Linh Group is seeking to sell more than 60 million shares to strategic investors to raise capital, the group's chairman Ho Huy told investors in the annual shareholders' meeting yesterday.
The shares, expected to sell for VND10,000 each, will raise the company's charter capital from VND1.017 trillion (US$48.2 million) to VND1.618 trillion ($76.7 million).
Huy said the company is negotiating with several prospective investors, including banks and organisations keen on the transportation sector. He refused to disclose specific information as the negotiations are ongoing.
Mai Linh Group, once one of Viet Nam's major taxi operators, was on the brink of bankruptcy last year with total debts reaching trillions of Vietnamese dong.
The group suffered constant losses during 2007-12, except in 2010 when it posted a modest profit of VND68 billion ($3.2 million).
According to market insiders, the problems of Mai Linh Group can be attributed to its poor governance as well as irrational investment diversification, especially its involvements in real estate.
The group has undertaken a severe restructuring process to reduce debts, including selling cars, real estate projects and rest stops. However, its total debt remained nearly VND4.7 trillion ($222.7 million) by the end of 2013, of which short-term debt accounted for VND2.075 trillion ($98.3 million).
Huy said losses in rest stop services and long-distance transport (Mai Linh Express) made up the biggest proportion, with loss of rest stop services over VND1 trillion ($47.4 million) and loss of the latter over VND200 billion ($9.5 million).
However, the group returned to being profitable last year, with the after-tax profit of the whole group reaching VND10.6 billion ($502,400 million), of which the parent company Mai Linh Group accounted for nearly VND5 billion ($237,000).
Due to heavy debts, the group decided not to pay dividends. This is the seventh consecutive year Mai Linh Group has not made a dividend payout.
This year, the whole group set modest business targets, including VND2.8 trillion ($132.7 million) in total revenue.
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