BRG to take over Hue ITC
BRG to take over Hue ITC
BRG Group will become the owner of Century Riverside Hotel Hue, one of the biggest hotels in Hue City, through holding of a 74-per-cent stake in Hue Investment and Tourism Ltd Co after the company's equitisation.
Hue ITC is scheduled to make its initial public offering on September 16 on the Ha Noi Stock Exchange. It will sell 2.9 million shares, equivalent to 25 per cent of the company's charter capital, at a starting price of VND12,700 (US$0.60) per share.
Foreign investors are allowed to buy all the shares up for sale.
About 74 per cent of shares will be offered to its strategic investor, BRG Group, a Ha Noi-based private company in finance, banking and golf resorts. It operates some famous golf resorts including Kings' Island, BRG Ruby Tree and Legend Hill.
The company's upcoming IPO is forecast to attract few investors due to its poor business results. Holding one of the biggest hotels in Hue Imperial City, Hue ITC is still a loss maker with cumulative losses reaching almost VND35 billion at the end of last year.
The modest proportion of shares offered to the public also decreases appeal to investors who expect to have controlling stakes in the company.
According to analysts, sales of State holdings in State-owned enterprises could only be attractive if share offering ratios are high enough to help investors control and operate the company.
In December 2015, the State Capital Investment Corporation successfully sold its entire 52.4-per-cent stake in Kim Lien Tourism Joint Stock Company, the owner of Kim Lien Hotel, for more than VND1 trillion, a nine-fold increase over the starting price of VND30,600 per share.
Century Riverside Hotel Hue, situated on a vast area of 20,000 square meters, has a prime location in Hue City, next to Truong Tien Bridge and the bank of romantic Huong River.
BRG Group has been selected as Hue ITC's strategic investor as it was the only one filing to participate in the hotel company's equitisation.
BRG is expected to spend at least VND75 billion to acquire the shares as the selling price will not be lower than the highest successful bidding prices at the IPO.
