Vinafood 2 pushes off equitisation to January 2017
Vinafood 2 pushes off equitisation to January 2017
Vietnam Southern Food Corporation Limited (Vinafood 2) has been authorised to extend its equitisation deadline to January 30, 2017, according to newswire Bnews.vn.
However, Deputy Prime Minister Vuong Dinh Hue asked the State Inspectorate to audit the results of Vinafood 2’s corporate value assessment and resolve its financial issues before launching its equitisation. This decision was made after it became public that the corporation is shouldering VND1.1 trillion ($49.5 million) in bad debts.
Previously, reacting to Deputy Prime Minister Vuong Dinh Hue’s urging the divestment and equitisation of Vinafood 2, the Ministry of Agriculture and Rural Development submitted the equitisation plan for approval.
Accordingly, the corporation will sell a part of the stated-owned stake and issue 16.5 million additional shares at the initial price of VND10,000 ($0.45) to raise its chartered capital.
After the equitisation, Vinafood 2 will be valued at nearly VND5 trillion ($224.2 million). The government will retain a 65 per cent stake, worth VND3.25 trillion ($146.4 million), strategic investors will hold 25 per cent, worth VND1.25 trillion ($56.3 million), 8.95 per cent will be offered to foreign and domestic investors, and the remaining offered to Vinafood 2’s staff.
According to Huynh The Nang, Vinafood 2’s general director, the corporation has already chosen a strategic investor from a list of five who expressed interest. However, he refused to disclose the identity of their choice.
Established in 2010, Vinafood 2 is one of the country’s largest rice exporters. However, its business results have shown continuous losses in recent years.
In 2015, the corporation earned VND22.8 trillion ($1.03 billion) in revenue, VND3.55 trillion ($159.9 million) less than in 2014. In addition, it incurred a loss of some VND9 billion ($405,278), bringing its total cumulative losses to VND1.06 trillion ($47.7 million) in the last three years.
The reason for Vinafood 2’s declining finances is the ineffective operations of its subsidiaries. Notably, 19 out of the corporation’s 44 subsidiaries ran a deficit in 2014. The two subsidiaries making the largest losses are Tra Vinh Food Company and TRAVIFACO, with VND164.66 billion ($7.67 million) and VND134.52 billion ($6.27 million), respectively.
