Nafoods to offer stocks to foreign shareholder at half price

March 12, 2020 | 17:45

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Nafoods Group JSC (HSX-NAF) has consulted shareholders in writing about the private issuance of 905,950 NAF shares to existing foreign shareholder Endurance Vietnam Capital I Limited, at just over half the market price.

nafoods to offer stocks to foreign shareholder at half price

Nafoods has polled shareholders on the planned private placement to the existing foreign shareholder

Nafoods Group has just sent shareholders a letter to gather opinions on its proposed sale of 905,950 shares to Endurance Vietnam Capital I Limited, a major shareholder currently holding 6.92 per cent in the company. The additional shares issued would account for 2.04 per cent of the voting shares in circulation.

This morning, NAF traded at VND24,200 ($1.05) a share. However, the private offering price for Endurance Vietnam is proposed at VND13,043 (57 US cents), which is only 54 per cent of the current market price.

The purpose of this private placement is to supplement Nafoods' working capital. Individual shares offered for sale this time will be restricted from transfer within a year. The offer will be made within 2020, after approval is secured from the State Securities Commission.

Nafoods also asked shareholders to authorise the Board of Directors to proactively deploy, develop, and adjust the content of the offering plan as well as the plan to use the proceeds and set a time for the offering.

Earlier, in 2019, Nafoods also signed with the International Finance Corporation (IFC) on the sale of preferred stocks. Accordingly, IFC will fund Nafoods $8 million in exchange for preferred stokc with the option to convert them into ordinary shares.

This capital is used to expand the factory in Long An and build a fruit packing facility located in the Central Highlands region as well as develop a new business of fruit trees.

In 2019, the export market has seen favourable developments, boosting the sales of Nafoods sharply to VND1.04 billion ($45,220) compared to the VND600 million ($26,090) in 2018, an increase of 73.6 per cent. However, expenses increased sharply. For example, sales expenses increased by nearly 2.4 times and interest expenses nearly doubled, resulting in after-tax profit of only VND48.9 billion ($2.13 million), up 21.3 per cent compared to a year before.