Offering to raise capital by 200% to buy dominant international school
Thai Nguyen Book Issuing Joint Stock Company (UPCoM: STH) has just announced the Resolution of the Board of Directors on the closing of the list of shareholders to exercise stock options. The last registration date is on August 19.
Specifically, the company plans to issue 13 million shares to increase its charter capital to 195 billion, the performance ratio of 1: 2 (1 share is entitled to 1 right, for every right to buy 2 new shares). Offering price to shareholders is 10,000 VND / share, equivalent to the expected amount to mobilize 130 billion VND.
On the floor of UPCoM on March 17th, with the reference price of 10,500 VND / share, STH shares increased sharply to 23,600 VND / share as at present, equivalent to a 125% increase. Liquidity reached tens of thousands of shares per session.
The Board of Directors commits that the proceeds will be VND 130 billion, equivalent to 100% of the offering amount; the basis is that members of the Board of Directors who are shareholders will exercise their rights and commit to buy back the unsold shares.
Regarding the plan of using capital, the company uses all of its capital to buy back the capital of Thai Hung Trading Joint Stock Company in the project “Thai Hung International Kindergarten and Primary School, Middle School, High School. Thai Hung (IRIS) ”.
IRIS School Perspective. Photo: IRIS School.
The company wants to increase the capital contribution to participate in business cooperation at the above school building from 50.4 billion VND to 180.4 billion VND, equivalent to the ownership rate increased from 21.4% to 76.5%. The company also said that it could proceed to own 100% of the asset value of the IRIS Inter-level School project above before the expiration of the business cooperation contract with the partner. Increasing the ownership rate will help businesses be more proactive in managing their assets, increasing the benefits from school operation and exploitation; thereby increasing the profits of the education and training segment in the coming time.
Increasing capital from 2 billion to 65 billion in 2019
Publishing Thai Nguyen books, formerly known as Thai Nguyen Book Publishing Company, is 100% state-owned and equitized in 2003 with a charter capital of 1.2 billion VND. In 2008, the company increased its capital to 2 billion and by 2010 the State withdrew all capital.
In February 2019, the company implemented procedures to change business registration to increase capital from 2 billion VND to 65 billion VND in order to carry out business cooperation into IRIS inter-level international school. However, until May 31, 2019, the new shareholders have fully contributed the additional capital. Therefore, the Inspector of the Department of Planning and Investment of Thai Nguyen issued a decision to sanction VND 12.5 million and the company has fully paid the fine into the State Treasury.
According to shareholder structure at the end of 2019, Thai Hung Trading Joint Stock Company is the largest shareholder with 18.46% capital, followed by 3 individual shareholders, including Chairman Nguyen Thi Quy (12.53%), Member of the Board of Directors Nguyen Thi Vinh (11.05%) and Member of the Board of Directors, Bach Phuong Vinh (11.04%). Ms. Vinh is also the Principal of IRIS.
With 8 bookstores in Thai Nguyen, the company recorded net revenue of more than 20 billion VND in 2019, an increase of 40% compared to 2018 due to promoting the sale of textbooks, learning equipment Profit after Tax reached 1.83 billion VND, 3.4 times more than the same period in 2018.
In the period 2020-2022, the company sets a high growth target with revenue up to 2022 reaching VND 60 billion and profit at VND 5.6 billion. The company may pay dividends from 2022 onwards at the expected rate of 5%.
In addition to selling books, the company has revenues from the joint venture IRIS International School project with the major shareholder of Thai Hung Trade. This project has a total investment of 234 billion VND with a term of cooperation of 5 years; in which, STH contributes 21.5% of shares and receives economic benefit equivalent to the ownership ratio. This project has started enrollment since September 2019 for preschool and primary classes. The project has generated revenue but is suffering a loss, so it has not distributed any profit.
The company believes that the trend of international inter-level schools is thriving in the Vietnamese education system with typical examples such as Vinschool, Doan Thi Diem Greenfeild, TH School Moreover, Thai Nguyen province has the participation of many foreign enterprises, especially Samsung Thai Nguyen factory, so the demand for international schools in the area has also grown.