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T&T Group likely to become strategic partner of Vinafood 2

Released at: 17:12, 22/02/2018

T&T Group likely to become strategic partner of Vinafood 2

Illustrative image from doanhnghiepvn.vn

Vinafood 2 proposes agriculture ministry approve T&T Group as its strategic investor and submit its equitization plan to the PM for approval.

by Hai My

The T&T Group seems likely to become the strategic partner of the Vietnam Southern Food Corporation (Vinafood 2).

Vinafood 2 will offer 25 per cent of its charter capital, or 125 million shares, to a strategic investor after the company conducts its initial public offering (IPO) on March 14.

As the share price for a strategic investor is expected to be at least the same as the IPO starting price of VND10,100 ($0.45), the T&T Group will have to part with at least VND1.26 trillion ($56 million) to pick up the 125 million shares.

According to the company’s equalization plan, its strategic partner must be financially healthy so that it can help the firm restructure its financial system and be able to assist Vinafood 2 in seeking new markets and opening new distribution channels in both domestic and overseas markets.

The strategic investor must also meet other conditions, such as having operated in the agriculture sector for at least three years, having total assets of at least VND10 trillion ($440 million) as at December 31, 2015, recording net profits for the last three consecutive years, and posting a return-on-equity ratio of more than 5 per cent; all of which T&T satisfy.

Vinafood 2 has proposed MARD approve T&T Group as its strategic investor and submit the equitization plan to the Prime Minister for approval.

The company has charter capital of VND5 trillion ($220 million), with 51 per cent held by the State.

It will sell nearly 23 per cent of its capital, or 114.8 million shares, at the March 14 IPO, 125 million shares to a strategic investor, and the remainder to employees at a preferential price.

Vinafood 2 operates in importing and exporting food, processed food, and agricultural products but has been struggling with its current business model as its finance, production, market, and product development policies have been implemented ineffectively. 

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