Phuong Nam divests 12.5 per cent of CJ CGV to pay off debts
Phuong Nam divests 12.5 per cent of CJ CGV to pay off debts
Phuong Nam Cultural Company (code: PNC) has just announced to collect comments from shareholders on selling 12.5 per cent of CJ CGV Vietnam Co., Ltd. for VND160 billion ($7.05 million) to repay due debts.
Black Diamond Investment JSC would be the partner to purchase the shares. The major sector of this company is real estate, its charter capital is VND120 billion ($5.3 million), and it is managed by Vu Hoang Nhat (1983).
The biggest shareholder of Black Diamond is Vinh Vinh Phat Investment JSC with the ownership of 59.5 per cent, which was established in April 2018 and is also managed by Vu Hoang Nhat.
The transaction is expected to be carried out before July 5, 2018. If it is successful, PNC will reduce its ownership in CJ CGV to 7.5 per cent.
The money PNC would earn from the transaction will be mainly used to repay the debts of Cross Junction Investment Pte., Ltd. (CJI), including $7 million of original debt and VND18.5 billion ($0.815 million) of interest.
PNC is facing financial difficulties due to bad business results over the last years. Total short-term debts at March 31, 2018 exceeded short-term assets by VND195 billion ($8.6 million). Total debts due for suppliers at May 18, 2018 were VND321 billion ($14.14 million).
PNC’s Board of Management has been considering and looking for solutions to its financial problems without success. The proposal to raise its charter capital was not approved at the general shareholders’ meeting, while inventory has been accumulating over the years.
PNC’s ticker has been under supervision since February 27. If the company continues running losses, the ticker could be delisted as accumulated losses exceed equity.
CJ CGV Vietnam is 80 per cent owned by South Korean conglomerate CJ Group. CGV has 53 multiplex movie theatres and 324 screens at the moment. In 2017, CGV reported VND2.8 trillion ($122.7 million) in revenue and VND140 billion ($6.1 million) in net profit, taking up 47 per cent of the market as the leading film distributor and movie theatre operator in Vietnam.
