The Chairman presiding over the SHS 2024 Annual General Meeting
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According to the plan, the Company expects to issue a total of nearly 899.5 million new shares to more than double its charter capital to over VND 17,100 billion through four schemes.
The first scheme involves issuing shares to pay dividends for 2023, and the second scheme involves issuing shares to increase capital from equity (bonus shares). Both schemes have the same expected number of shares to be issued, at nearly 40.7 million shares, equivalent to a ratio of 5% (owning 100 shares will receive 5 new shares).
The third scheme involves offering nearly 813.2 million shares to the public for existing shareholders at a ratio of 100% (owning 1 share will be eligible to buy 1 new share). The Board of Directors proposed an offering price of VND 10,000 per share. The expected proceeds from this offering, amounting to over VND 8,100 billion, will be used by SHS to supplement its operating capital, with 40% allocated for margin lending and advance activities, and 60% for securities investment.
The fourth scheme involves issuing 5 million shares under an employee stock ownership plan (ESOP 2024) at a preferential price of VND 10,000 per share. The ESOP shares will be subject to a one-year lock-up period from the end of the offering period. The expected proceeds from this offering, amounting to VND 50 billion, will be used to supplement the Company’s operating capital.
The capital increase is expected to be carried out in 2024-2025 and/or after obtaining the approval of the relevant state management agencies.
Securities SHS plans to issue nearly 900 million shares, doubling its capital
At the meeting, a shareholder expressed agreement with the capital increase to strengthen the Company’s potential but also inquired about the Company’s plans to collaborate with foreign partners after the capital increase. They also requested that the Board of Directors and SHS implement appropriate business policies to drive growth and distribute cash dividends following the capital increase.
Mr. Do Quang Vinh, Chairman of the Board of Directors, stated that they have a strategy to find long-term investors and that many investment funds are already interested in investing in SHS. However, finding long-term partners is a lengthy process, and SHS has a cautious strategy for evaluation and selection, prioritizing the Company’s and shareholders’ interests. Regarding dividends, Mr. Vinh assured that when SHS achieves growth and performs well, it will provide profits and cash dividends to its shareholders.
Furthermore, the aforementioned shareholder suggested that SHS develop a plan to leverage the customer base of the Hanoi-based Saigon Commercial Joint Stock Bank (HOSE: SHB) for collaboration and growth. In response, Mr. Vinh affirmed that SHS always considers SHB as a financial institution that helps SHS increase profits and tap into the potential of the ecosystem. He emphasized the essential link between SHB and SHS, which contributes to the Company’s continued growth.
Another shareholder proposed that the Company consider borrowing capital from banks in the range of VND 4-5 trillion to reduce the need for capital through share issuances and alleviate the pressure of share dilution.
Addressing this concern, Chairman Do Quang Vinh replied that the Company has established strong relationships with various banks and has borrowing limits with major banks. However, SHS also possesses significant financial strength and ample capital sources. Therefore, the Company is currently optimizing the use of its internal resources and has not yet utilized external capital. With the capital increase, the new capital will reinforce the Company’s financial strength and support its long-term goals for development over the next three to five years. By 2030, SHS aims to become a financial investment group. Mr. Vinh also stated that they would consider additional external capital sources based on the shareholder’s suggestion.
Additionally, the Chairman shared that SHS has not fully leveraged the advantages of its member companies within the ecosystem, including those related to banking, insurance, and investment funds. He assured that SHS will soon implement a communication strategy to enhance shareholders’ and investors’ understanding of the Company’s capital utilization plans.
In parallel with raising capital through share issuances, SHS also intends to issue bonds. A shareholder questioned the rationale behind this decision, given the Company’s low debt. They asked why SHS does not take advantage of its existing capital and instead plans to issue bonds.
Mr. Nguyen Chi Thanh, General Director, explained that the plan to issue bonds and borrow capital are two tools to increase the Company’s capital. He stated that SHS would issue bonds with an interest rate of around 8%.
Mr. Le Dang Khoa, Member of the Board of Directors, also commented that bond issuance is a common tool for securities companies. He noted that short-term bank borrowing is challenging, and if the Company relies solely on bank loans, it may face difficulties when banks recall the loans.
