Vinafood 2 sets out its equitization to offer 25 per cent stake for strategic investors

The equitization plan of Vinafood 2 in the form of selling State shares in the company has been approved.

Vinafood 2’s chartered capital is VND 5,000 billion (roughly US$220.51 million), of which the State holds 255 million shares, representing 51 per cent of its charter capital. The Ministry of Agriculture and Rural Development will be the representative of state ownership in the company after the equitization.

The number of shares auctioned to ordinary investors is 114.8 million shares, accounting for 22.97 per cent of the company’s charter capital. The starting price of the auction is VND10,100 (roughly US$0.4454) per share.

Strategic investors will buy 125 million shares, representing a quarter of Vinafood 2’s charter capital. According to Vinafood's invitation to investors, the criteria for choosing strategic investors include businesses having the total asset of at least VND10 trillion (roughly US$441.01 million) and the minimum chartered capital of VND3,500 billion (roughly US$154.355 million). The strategic investors must also record positive after-tax profit in three consecutive years and there must be no accumulated losses by the end of 2015.

Strategic investors must also commit to joining the company in implementing agricultural restructuring, linking with farmers to form a value chain in the field of rice production and export.

Vinafood 2 is specialized in the field of trade, food import, and export, processed food, agricultural products, and storage. The company currently owns the distribution system throughout the southern provinces of Vietnam.

However, the company is facing a lot of financial obstacles. According to the report released at the end of June 2017, the company had total assets of VND8,799 billion (roughly US$388 million) and long-term loans of VND3,770 billion (roughly US$166 million). The equity and accumulated loss of the company were recorded at VND 3,885 billion (roughly US$ 171.33 million) and VND912 billion (roughly US$40.22 million).

In the first half of last year, Vinafood 2 reported a loss of VND118 billion (roughly US$5.2 million) while it gained VND156 billion (roughly US$6.88 million) in profit in 2016.