Truong Thanh Furniture (TTF) wants $43m merger
Truong Thanh Furniture (TTF) wants $43m merger
Truong Thanh Furniture Corporation will seek shareholders’ approval for a merger with another company which work in the same area in an effort to restructure the loss-making business.
The merger, if approved, will be made through a share swap.
The company plans to issue 100 million shares worth VND1 trillion (US$43 million) in exchange for the target company’s shares. The swap ratio will be determined on the basis of a comparison of prices of Truong Thanh Furniture and the target company.
The target company’s identity has yet to be disclosed.
The merger will be carried out in 90 days after getting approval of the State Securities Commission.
Truong Thanh Furniture’s charter capital will increase to nearly VND3.15 trillion from current VND2.15 after the merger.
Earlier in its annual shareholders’ meeting in April, vice president of the company Mai Huu Tin said the company wanted to acquire a company working in the same sector and having enough capacity (management, marketing and market) to boost the company’s business performance.
Truong Thanh Furniture is in a difficult time. It reported a loss of more than VND685 billion in the first six months of this year, lifting a cumulative loss to VND2.1 trillion as of June 30, 2018.
By the end of June, its total assets decreased by VND900 billion to VND3.3 trillion from VND4.2 trillion recorded at the beginning of the year. Short-term liabilities of the company exceeded VND100 billion over the short-term assets.
Earnings per share (EPS) ratio saw a loss of VND3,193, almost three times higher than the number of the same period of last year.
Based on the evidence obtained, the audit found out a material uncertainty about the company’s ability to continue as a going concern.
Shares of the company, TTF, were put on alert and not eligible for margin trading on the Ho Chi Minh Stock Exchange since April 19 this year. TTF prices have hit the maximum rise of 7 per cent capped for a single trading day for three consecutive sessions, closing Tuesday at VND5,150 per share.
An extraordinary shareholders’ meeting will be held on October 25 to collect opinions of stakeholders on the merger and other important issues.
The company is also planning to change its name to Toto Furniture Joint Stock Company, abbreviated as Toto. The stock code remained unchanged TTF on the Ho Chi Minh Stock Exchange.
A number of changes will also be made to personnel in the company’s management board.
