Who bought the shares of Sao Vang Rubber JSC?
Four investors, including three individuals and an organisation, spent about VND195.5 billion ($8.5 million) to buy 4.2 million shares of Sao Vang Rubber JSC (SRC), subsidiary of Vietnamese chemical group Vinachem.
The Ho Chi Minh City Stock Exchange (HSX) on June 4 announced the results of the auction Sao Vang Rubber JSC shares held by Vinachem on the same day.
15 per cent of SRC capital owned by Vinachem was offered at the starting price of VND46,452 ($2.02) per share, equivalent to the divestment value of about VND195.5 billion ($8.5 million).
As a result, four investors, including an organisation and three individuals bought 4.2 million SRC shares at the price equal to the starting price.
Notably, SRC's market price on June 4 was about VND25,000 ($1.09), but these four investors paid nearly twice this amount to get ther hands on Vinachem's interest.
Information about the identity of the four investors has yet to be published, but according to the announcement of the HSX, none of them is a foreign investor.
Just before the auction, an individual investor, Nguyen Hoang Cuong who had deposited VND19.6 billion ($852,200) to register to buy all SRC shares offered by Vinachem had unexpectedly withdrawn his bid. Cuong said that after a careful study of the documents, he found that SRC was not as attractive as he previously thought and did not match his investment objectives. After he withdrew his bid, his deposit was refunded, according to Enternews.
In addition, before the auction, at the 2019 annual general shareholders' meeting of SRC on April 27, a group of shareholders holding 19.02 per cent succeeded in securing two out of the five chairs on the Board of Directors (BOD) and one of the three chairs of the Supervisory Board (SB) at SRC.
In addition, the fact that the four investors all paid similar prices near the starting price, and bought up the entire volume registered to sell by Vinachem brings up the possibility that these four investors were working in tandem.
This group of shareholders is most likely related to Hung Thinh Phat Real Estate Investment Co., Ltd. (Hung Thinh Phat) and Hoanh Son Group JSC (Hoanh Son), which are implementing a high-end real estate project with SRC at 231 Nguyen Trai Street, Thanh Xuan district, Hanoi.
After selling 15 per cent, Vinachem reduces its ownership ratio in SRC from 51 to 36 per cent. According to the corporation's restructuring scheme, the rest will soon be divested as well.
This is a chance for investors to put their hands on a share in SRC.
SRC's potential is generally regarded positively because its core business is in the production of tires and tubes and it is a well-known national brand. Besides, the enterprise owns a large land fund, including a 6.2ha area in the centre of Hanoi.
In 2018, SRC achieved VND925 billion ($40.22 million) in revenue, VND12.2 billion ($530,500) in after tax profit.