Song Da Corp sells entire stake in VIS

Workers produce steel ingot at a factory of the Viet Nam-Italy Company. Construction firm Song Da reportedly sold its entire stake in the steel company.- Photo baoxaydung.com.vn

Market brokers on Tuesday recorded that 26.1 million shares of the steel producer, which is listed as VIS on the HCM Stock Exchange, were traded via advance negotiations.

That number of shares were traded at the price of VND12,800 (US$0.57) per share, making the transaction worth more than VND334 billion ($14.85 million).

On July 29, Song Da Corp registered to sell the same amount of shares in VIS in order to remove its entire ownership in the steel producer. The transaction was expected to occur in August.

Song Da Corp had previously registered three times to sell its entire its ownership in VIS since November 2015, but transactions were not successful as the steel producer's share prices were not high enough.

VIS, later on Tuesday, confirmed to the local media that it was Song Da Corp that conducted the trading to divest from the steel company.

VIS also said that Thai Hung Trading JSC was among the firms that purchased the steel company's shares and become a major shareholder of the company.

However, details of the transaction have not been revealed.

Song Da Corp and VIS declined to comment on the transaction, while officials from Thai Hung Trading JSC were not available for comment.

Thai Hung Trading JSC is a steel trader and producer based in the northern province of Thai Nguyen and has total fixed asset worth VND4.1 trillion. The company is also said to occupy a market share of 12 per cent in the steel industry.

VIS is a steel producer based in Ha Noi. The company has recently announced a year-on-year drop of 80 per cent in its after-tax profit to VND587 million in the second quarter of this year.

A sharp drop in the company's profit came after the steel market slowed down in the second quarter, resulting in a lower sales volume for the company.

Besides, the inventories remained high as steel prices declined sharply, VIS said, and added that it made the steel firm create a defensive provision worth VND23.3 billion for the inventories and receivables.

The VIS share price has jumped 14 per cent in the last four trading days, closing on Wednesday at VND13,000 per share. The share price has more than doubled since March.