Tran Ba Duong, chairman of THACO, sold his entire 11.26 million shares in Hung Vuong JSC (UPCoM: HVG), equalling 4.96 per cent of the group’s charter capital, after it proved unable to rescue the company.
|Tran Ba Duong billionaire and Thaco shareholders complete withdrawal from Hung Vuong |
Along with Tran Ba Duong, Tran Oanh Manufacturing and Trading Co., Ltd. also sold 8.6 million shares or 3.79 per cent in this group. At the time of the deal, Hung Vuong's shares were traded at VND2,300 (10 US cents).
In January 2020, Thadi Agriculture Farming Processing & Distribution JSC (Thadi) – a subsidiary of THACO – and other shareholders of THACO bought a 35 per cent stake of Hung Vuong with the intention of supporting Hung Vuont overcome its difficulties.
To this effect, the two parties established a joint venture that is 65 per cent owned by Thadi. The latter also assigned senior personnel to hold important positions at Hung Vuong, including vice chairman of the board of directors, financial director, and technical experts.
The joint venture invested VND2 trillion ($86.96 million) in breeding mother pigs in An Giang and Binh Dinh provinces while Thadi will invest in developing a pig farm (1.2 million pigs per year) meeting Development Food Security Activities (DFSA) standards.
Despite high ambitions at the beginning, Thadi's support had little effect. By Agugust 2020, Hung Vuong was forced to move from the Ho Chi Minh City Stock Exchange to the Unlisted Public Company Market. Since then, HVG shares dropped from VND5,400 to VND2,600 (23.47-11.30 US cents).
In the last two months of 2020, Thadi divested its entire holdings in Hung Vuong, leaving only THACO shareholders at the company.
In 2019, the corporation reported a loss of VND1.12 trillion ($48.7 million) and accumulated losses of VND1.74 trillion ($75.65 million). Its equity capital was about VND660 billion ($28.7 million) with total debts reaching VND7.1 trillion ($308.7 million). The corporation has delayed publishing audited financial statements for 2020.
Hung Vuong was established under the name of Hung Vuong Co., Ltd. in September 2003 as a processing plant of pangasius for exports. After 15 years in the industry, Hung Vuong JSC currently runs a production system from breeding, aquaculture, and processing to cold storage and exporting.