Extraordinary General Meeting 2023 session 2 of CII held on February 27th, 2024. Source: Thượng Ngọc
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On the morning of February 27th, 2024, Ho Chi Minh City Infrastructure Investment Joint Stock Company (HOSE: CII) held the Extraordinary General Meeting session 2 of 2023 with the main agenda related to certain adjustments regarding the company’s bonds.
Adjustment of approximately VND 1,660 billion bond package
According to the resolution of the General Meeting of Shareholders on May 24th, 2023, CII plans to issue a convertible bond package CII42301 (package 1) with a total value of over VND 2,840 billion and another convertible bond lot (package 2) with an approximate mobilization value of VND 1,660 billion. However, due to the extended issuance time of package 1, package 2 also had to adjust the capital utilization plan, as well as some issuance items.
The result of the General Meeting of Shareholders CII approved that if the number of bonds that existing shareholders do not purchase will be offered for sale to the company’s employees. According to the adjustment at the General Meeting, if there is a surplus, the bonds that are not purchased will be canceled instead of choosing other investors.
On the other hand, CII plans to reduce the number of bonds issued from nearly 17 million bonds to approximately 16 million bonds, which means the amount of funds raised if the issuance is successful will decrease from VND 1,660 billion to nearly VND 1,592 billion. The reason given by CII is to match the number of outstanding shares of the company as well as the 20:1 conversion ratio implementation.
However, in this General Meeting, CII approved not to cancel the suspension of conversion of tranche 7 (expected on May 2nd, 2024) and tranche 8 (expected on November 4th, 2024) of the bond lot CII42013, leading to the possibility that some bondholders who convert will increase the number of outstanding shares while the issuance of package 2 has not yet been implemented.
Therefore, to ensure the 20:1 ratio, the General Meeting of Shareholders approved the adjustment of the value of issuance of package 2 to a maximum of VND 1,606 billion, instead of a fixed VND 1,592 billion as previously announced. The maximum number is based on the case that all bondholders convert to shares.
Negotiating the acquisition of a BOT project
Sharing about the situation of BOT projects, Mr. Lê Quốc Bình – CEO of CII said that according to the PPP law, PPP projects from 2020 must be carried out through bidding, and the state will prepare bidding documents. Due to the time it takes to prepare the documents, which is from 3 to 5 years, until now there have been no BOT projects implemented, except for some sections of the North-South highway. Mr. Bình predicted that no later than the third quarter of 2025, it will be possible to invite bids for BOT projects under PPP form.
Regarding CII, the company is currently negotiating to take over a BOT project from an investor. If successful, the project can start tolling by the end of 2024 or in the middle of 2025. Mr. Bình assesses that if the Trung Lương – Mỹ Thuận project scores 10, this project scores 8-9 as it is located on the route connecting industrial parks of 5 provinces to the largest port in Vietnam at present. Since the contract has not been signed, CII has not announced the project name yet. On the other hand, the company is proposing to expand the scale of the project.
Raising the profile of De Lagi, the Thủ Thiêm land bank is still unresolved
Regarding real estate, CII assesses that the approved 1/500 planning of the De Lagi project in Binh Thuan is a step forward. According to the previous plan, CII was expected to invest in this project at a moderate level, but considering that from 2020 to now, PPP projects must be put out to bid, and the coastal land bank from Ho Tram to Novaworld Phan Thiet is almost exhausted, so the company has a plan to raise the profile of the De Lagi project. CII will focus on this in 2024, and currently the company is working with some consultants.
On the other hand, Mr. Bình evaluates that the amended Land Law is a major solution for NBB. With a land bank including both residential and non-residential land, NBB is likely to be approved as the investor of a commercial housing project. The current project of NBB is the high-rise apartment complex NBB Garden II and III, which is still in the process of completing the legal procedures.
Regarding the land bank in Thủ Thiêm, Mr. Bình said that CII still has 6ha of land in Thủ Thiêm, but it is entangled in terms of legal issues, the land price has been determined but still not transferred. The land is registered under the name of CII but the company is not able to implement the project.
When shareholders wondered about the stability of the 16% dividend distribution plan per year, the CEO of CII said that he could not guarantee maintaining this dividend distribution ratio. With the current cash flow situation, CII can maintain this ratio but there are always unexpected risks such as the epidemic leading to toll suspension.
