Transport Ministry supports Dutch firm's expansion bid
Transport Ministry supports Dutch firm's expansion bid
The Transport Ministry has proposed that Shipbuilding Industry Corporation (SBIC) be allowed to sell 70 per cent of shares at Song Cam Shipbuilding Joint Stock Company to Damen Shipyards Group.
The proposal, which has been made along with the requirement for such a high volume of shares by the firm based in the Netherlands, comes even as Viet Nam's current regulations impose a 49 per cent limit on foreign investors' ownership in the domestic stock market.
In a document sent to the Prime Minister last week, which was reported by VnEpress.net, Deputy Minister Nguyen Van Cong evaluated that Damen's purchase will be an opportunity to lure more investment capital and set the foundation for better cooperation between Damen and other SBIC companies in the future.
"SBIC is making progress in market expansion, especially in the world market, to earn the trust of foreign investors," Cong noted.
Therefore, the ministry has asked the Prime Minister to allow the purchase, which will be held through direct negotiations between the two sides. A price will be set in line with regulations," Cong remarked.
Chairman of SBIC Nguyen Ngoc Su said the corporation has had several meetings with Damen's representatives to discuss various ways to solve difficulties and strengthen the investment cooperation between the two groups.
The SBIC has suggested Damen to first buy 49 per cent of Song Cam shares. Later, when business conditions become more convenient and the Government approves, the SBIC will sell more Song Cam shares to increase Damen's ownership to 70 per cent as it desires.
"However, Damen has no intension to purchase Song Cam shares in such a way. They expect the Government to allow it to buy 70 per cent of shares in one go," said Su.
Su pointed out that Damen has been SBIC's most important partner. It has been supplying materials to Vietnamese shipbuilding companies. For example, all the orders of Song Cam-Ben Kien shipbuilding factory come from Damen. The firm has also supplied to Halong shipbuilding factory, ensuring jobs for workers until the end of 2016. It has plans to supply the orders of Pha Rung factory in the future.
However, after failing to expand its investments in Viet Nam, Damen has begun moving a number of orders to other countries.
Su noted that his corporation expects the Government to consider Damen's case an exception and allow it to purchase 70 per cent of Song Cam shares.
Song Cam shipbuilding company is the best of the total eight SBIC companies. It has not recorded any loss in the past five years and has brought the highest profit to SBIC thanks to some valuable contracts of ship exports, in which the crucial one has been a joint venture with the Damen group named Damen Song Cam.
Early last year, the joint venture expanded its operation with an investment capital of US$60 million, of which 70 per cent came from Damen.
The Dutch company began its cooperation with Viet Nam Shipbuilding Corporation, or Vinashin, which was then restructured to SBIC, more than 10 years ago.
