Vietravel is waiting to receive approval for its plan to transfer its capital at Vietravel Airline at the shareholders' meeting on May 25.
|Vietravel currently owns the entirety of the charter capital of Vietravel Airlines |
Vietravel is looking to reduce its full ownership in Vietravel Airline to reduce the losses it is suffering from the COVID-19 pandemic.
According to the plan, Vietravel will pass the title of the parent company to Vietravel Holding, which will hold the entire capital at Vietravel and Vietravel Airlines. It will also ask for authorisation to look for partners and negotiate, decide the ratio of shares to transfer, and pricing.
Explaining this, Nguyen Quoc Ky, chairman of Vietravel’s management board, said that without the expected recovery in tourism, the losses of Vietravel Airline will hurt the parent company.
Currently, Vietravel owns 100 per cent of the airline's charter capital worth VND700 billion ($30.43 million), which means all of its losses will funnel into the parent company’s consolidated financial statement.
“Restructuring, specifically reducing ownership in the airline needs to be carried out as soon as possible,” said Nguyen Quoc Ky, chairman of the company’s Management Board.
In the first quarter of 2021, Vietravel’s revenue was VND277 billion ($12 million), down 65 per cent on-year, resulting in a loss of nearly VND73 billion ($3.17 million).
Vietravel targets sales of VND6.243 trillion ($271.43 million) and a pre-tax profit of VND10 billion ($434,780) in 2021. Last year, the company earned VND1.518 billion ($66,000) in revenue and bore a loss of VND98 billion ($4.26 million).