After a failed auction in July, state-owned telecommunications giant Viettel will once again try to divest Vinh Son Co., Ltd. by staging yet another auction on September 14.
|Viettel will hold another auction for its stake in Vinh Son |
The Hanoi Stock Exchange has announced the auction of 4.6 million shares, equaling a 39.9 per cent stake, in Vinh Son Co., Ltd. at the initial price of VND200,000 ($8.70) apiece.
Viettel expects to acquire VND922 billion ($40.1 million) from this divestment.
As of June 30, Viettel owned 39.3 per cent equity capital in Vinh Son while Dragon Village Real Estate JSC owned 60 per cent and the remaining 0.1 per cent of equity capital was held by an individual investor.
The divestment occurs as Vinh Son faces difficulties in expanding the Rose Valley urban project located in Me Linh and Dong Anh districts in Hanoi. Notably, the company is completing procedures to prepare land to develop the project, however, the problem is that investors will have to bid for the land use rights of the land area in question. In addition, there are also difficulties with land clearance.
According to Vinh Son’s business results from the first half of this year, the company acquired VND96 million ($4,170) in revenue and reported a loss of VND32 million ($1,390).
The auction is also part of the 2016-2020 divestment plan, which was approved by the prime minister in March 2018. Accordingly, Viettel will also decrease its ownership in Viettel Post and Viettel Consultant and Design JSC from 68.08 to at least 50 per cent and Viettel Construction Corporation from 73.2 to at least 50 per cent. So far, Viettel worked with consultancies to appraise the value of its stake at these companies.