Government to fully divest of Hapro

Hapro holds various golden land plots in Hanoi

According to information published on the Government Portal, the government has approved Hapro’s equitisation plan. Accordingly, Hapro will put 75.9 million shares or 34.51 per cent stake on sale at its initial public offering (IPO) at the initial price of VND12,800 ($0.56) apiece, and offer 143 million shares, or 65 per cent, to strategic investors. The remaining 0.49 per cent will be handed to employees.

Hapro is on Hanoi’s list of equitisation in the period of 2016-2020. The company currently has a charter capital of VND2.2 trillion ($96.84 million), equaling 220 million shares.

Ealier on March 7, 2017, the Hanoi People’s Committee issued Decision No.1558/QD-UBND on criteria for selecting Hapro’s strategic investors.

According to this decision, strategic investors should satisfy the following conditions: they should have an owner’s equity of over VND2 trillion ($88.04 million) in the most recently audited financial report by an independent auditing company, no bad debts, a debt/equity ratio less than three in their 2015 audited financial statement, and they should also have positive after-tax profit in 2014, 2015, and 2016.

Besides, the investors must obey the law and be able to prove that they have the amount of money or assets with a value at least equal to the value of stakes registered to purchase. Particularly, they must deposit 30 per cent in advance and have a bank guarantee for the remaining 70 per cent they register to buy at the initial offering price of Hapro.

Bidders will have to buy after winning the auction and if they refuse to buy after all, their deposit will not be refunded.

The investor should be experienced in commercial operations. Priority will be given to those with experience in import-export, domestic retail, and those who have an established retail system or are holding stakes in such enterprises.

Strategic investors must commit to taking over all the rights and obligations of the corporation at the moment of valuation. Meanwhile, strategic investors are also responsible for the workforce in this state-owned corporation in accordance with the law after undertaking equitisation.

Hapro’s selling point lies in the fact that it is the operator of a chain of supermarkets and convenience stores and it also holds controlling interest in numerous subsidiaries, which have plenty of huge real estates.

One of the attractive real estates owned by Hapro is the nine-story shopping mall and office building in Le Duan Street. The construction covers an area of 1,624 square metres, however, it has been delayed for months due to financial obstacles and failing to get approval from local authorities to increase the building’s height beyond what was previously approved. Another real estate project is in Cat Linh Street, which currently serves as Hapro’s headquarters.

In addition, a range of Hapro subsidiaries hold further valuable land parcels, like Hapro Holdings, which owns eight real estate projects in Vietnam, or Long Bien Trade Investment JSC with its 11 office buildings, and Trang Thi Trade & Service Company with 42 land plots for leasing.

When Hapro previously divested from some of its subsidiaries, the stake sale attracted a lot of attention from investors.

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