Government to invest $47 million in debt-laden steel firm
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| Tisco products are used in many important national projects. The corporation is expected to receive $47.6 million from the State Capital Investment Corporation to improve production. - Photo tisco.com.vn |
If successful, the issuance would bring TIS’ charter capital up to VND2.840 trillion ($133.3 million), 35.2 per cent of which will be contributed by the SCIC and 42.1 per cent by Vietnam Steel Corporation (VNSteel).
Transfer of these shares will be restricted till a year after the issue is concluded and all proceeds will be used for phase 2 of a project to expand TIS’ production.
TIS reported consolidated losses of VND109 million ($5,166) in the first half of 2014, compared to a loss of VND844 million ($40,000) over the same period last year. As of June 30, TIS, with equity of VND1.71 trillion ($81 million), had liabilities of VND7.541 trillion ($357.4 million), of which VND2.2 trillion ($104.2 million) was short-term debts.
The project to expand TIS started in 2007 but has been suspended twice due to capital shortages and unfavourable market developments. The cost for phase two has risen from the initial VND3.843 trillion ($182.1 million) to VND8.104 trillion ($384 million). The value of the partly finished phase two is currently at VND4.330 trillion ($205.2 million), according to the company’s first half financial statement.
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