SCIC seeks approval for Vinamilk’s (VNM) ESOP plan
SCIC seeks approval for Vinamilk’s (VNM) ESOP plan
The State Capital Investment Corporation (SCIC) has asked for the Prime Minister’s approval of Vinamilk’s plan for an Employee Stock Ownership Programme (ESOP) in the 2018-21 period.
In a document sent to the Government Office, SCIC has proposed that Vinamilk issue ESOP shares in two phases, of which the first issuance, expected this year, will offer 14.5 million shares, equivalent to 1 per cent of its charter capital.
The second phase will also float shares worth 1 per cent capital in 2020 if the company accomplishes its revenue and profit targets in three years, from 2017 to 2019, or achieves the minimum annual growth rate of three years from 2017 to 2019, attaining the objectives of the management board.
ESOP shares are restricted to transfer within two years, with 50 per cent of the shares being cleared away every year.
The issuing price will be equal to two times the book value per share of the company’s latest consolidated financial statement.
ESOP is a kind of employee benefit plan that provides a company’s workforce with an ownership interest in the company.
SCIC has rationalised that the previous ESOP issuance had contributed to Vinamilk’s positive business performance as well as encouraged employees’ loyalty.
Vinamilk’s revenue and pre-tax profit increased by an average of 14.8 per cent and 13.4 per cent, respectively, in the 2012-16 period. These numbers in 2017 were VND51.04 trillion (US$2.24 billion) in revenue (up 9 per cent year-on-year) and VND10.28 trillion in net profit (up 10 per cent year-on-year).
Viet Nam’s largest dairy firm was also a generous dividend payer with an annual dividend ratio of 45-83 per cent. The company has so far spent VND32 trillion for dividend payment during 2012-27, of which SCIC has received VND13.5 trillion.
Vinamilk’s shares have soared over 140 per cent, from VND86,500 per share in 2012 to VND208,600 each by the end of 2017. The company’s market value has also increased by 6.25 times compared to the end of 2011.
The proposal is under consideration of the Government Office, which has asked the ministries of Finance and Planning and Investment for feedback.
If approved, the State ownership ratio, represented by SCIC, will decrease by 0.71 per cent to 35.29 per cent.
