State-owned Vietnam Cement Industry Corporation (Vicem), holder of 35 per cent LafargeHolcim Vietnam, is still mum about the possibility of buying out Lafarge Holcim from the joint venture.
At the end of 2016, SCCC will finalise the deal with lafargeHolcim to buy its 65 per cent stake in LafargeHolcim Vietnam.
As agreed with LafargeHolcim earlier, Vicem has the right to purchase these shares before SCCC. However, Vicem’s next move remains unclear.
Talking to VIR, Luong Quang Khai, chairman of the board of members at Vicem, offered no final answer to the question of buying any of the 65 per cent.
“We did think about it,” he said. “We are concerned whether the new owner will manage the business well and benefit shareholders if we do not buy the stake.”
Established in 1994, Holcim Vietnam currently has a total capital of $441 million. It currently owns a system of plants with the total capacity of 6 million tonnes of cement per year. The company is valued at $890 million and SCCC has offered $580 million for the 65 per cent stake.
Vicem currently has a chartered capital of VND13 trillion ($583 million). As it is in the process of equitisation, arranging VND12 trillion ($538 million) to buy the stake in LafargeHolcim Vietnam is not easy. Moreover, as Vicem is a state-owned company, it needs to secure approval from related ministries and government agencies.
At the moment, the Vietnamese cement market is in a surplus. Vicem has a 36 per cent market share. In 2015 it earned pretax profit of VND2.3 trillion ($103 million).