Viglacera divested from baked clay bricks group: Selling 51% of Ba Hien capital of VND 7 billion

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All 511,711 shares of Ba Hien Joint Stock Company were successfully auctioned on June 23. The auction attracted 14 investors to attend with the registered purchase amount of 2.14 million shares, nearly 4 times the offering volume. All of these shares went to an investor who offered the auction price of VND 15,100, half the starting price (VND 10,000 / share). BHV shares of the company are traded on UPCoM however often in a state of white liquidity, the current market price at 6,000 VND / share.

The auction was conducted at Wall Street Securities Corporation.

The policy of implementing procedures to divest Viglacera’s capital in baked clay brick production units is Ba Hien Joint Stock Company, Viglacera Tu Son Joint Stock Company, Viglacera Ha Long 1 Joint Stock Company, and the Company. Viglacera Hop Thinh, Viglacera Tu Liem Joint Stock Company in 2020 was proposed at the last shareholder meeting.

As explained by the company leader, the competitive pressure of the market is increasing, deeply reducing the profitability of some units and generating losses for traditional brick production units. In 2019, this group earned VND 1,684 billion in revenue and VND 107.5 billion in profit before tax.

In Ba Hien, this business is operating below cost price since 2018. After deducting all costs, Ba Hien’s after-tax profit is up to 15 billion. Accumulated losses by the end of last year increased to VND 61 billion, while the company’s charter capital was less than VND 10 billion. However, Ba Hien is also managing the land of more than 14.1 ha in Ba Hien commune, Vinh Phuc province under the State’s land lease contract till 2046.

Also at the recent shareholders’ meeting, the corporation expanded the application of the over-selling principle in lieu of the principle of unanimous agreement with a number of decisions of the Board of Directors, including the divestment of subsidiaries.

These brick companies have been operating for a long time, managing the large land areas they are using as factories. Meanwhile, the Ministry of Construction is currently the largest shareholder of Viglacera with more than 38% ownership of equity. The divestment in these companies therefore also needs to comply with the State’s regulations, especially Decree 167/2017 / ND-CP stipulating the restructuring and handling of public assets. It is expected that in November 12, 2020, the Ministry of Construction will auction to divest all capital at Viglacera.

Source: vietnamfinance.vn