Vinatex IPO plan unravels

Vinatex is in high gear to be able to finalise the group and some member firms’ equitisation schemes in late 2012, according to a Vinatex source.

The source also revealed that 80 per cent of Vinatex member units had taken the move which brought upbeat business figures in post-equitising era for not a few of them. For instance, in 2011 Nha Be Garment reported dividend rate from 18-25 per cent and VND65 billion ($3.1 million) pre-tax profits.

Four limited liability and several member units under Vinatex are reportedly in the legal setup stage to climb onboard the equitising bandwagon together with parent company Vinatex.

Vinatex’s deputy general director Le Tien Truong insisted Vinatex’s commitment to turn itself into a shareholding company would meet its target, despite Vietnam’s stock market woes.

However, a Ministry of Industry and Trade (MoIT) representative assumed it would be unlikely for the state group to finalise its equitising plan in 2012 since Vinatex just sent a dispatch to the MoIT asking for selection of a body to work on enterprise valuation. Accordingly, five Vinatex members are awaiting approval from MoIT’s Steering Committee for Streamlining Enterprises to be equitised.

In fact, though the textile-garment sector’s 2011 export value hit $14 billion, its member companies have mainly engaged in export processing with low profit margin rates. The area with high profits fibre, textile and dyeing is the sector’s most critical point with 65 per cent of materials and accessories being imported. This made textile and garment shares less charming in the eyes of investors.

In 2012, Vietnam aims to achieve $15 billion from textile and garment exports. However, it would be hard for the sector to realise the target since its half-year export value fell below 50 per cent of projection. Vinatex alone reported export earnings of $1.26 billion in the period tantamount to 48 per cent of the projection.