The Rubber Tree’s Retreat: A Strategic Divestment

DRG's resolute move to offload nearly 22.4 million registered DRI shares is a strategic step towards their broader capital divestment plans.

0
105

Dak Lak Rubber Joint-Stock Company (DRG-UPCoM) announces its continued divestment from Dak Lak Rubber Investment Joint-Stock Company (DRI-UPCoM)

Accordingly, DRG has sold over 4.2 million DRI shares out of the previously registered amount of nearly 22.4 million shares for sale from June 3rd to July 2nd.

DRG attributed the reason for not selling all the registered shares to unfavorable market conditions. Following the transaction, DRG’s ownership stake in DRI decreased from 66.6% to 60.84%, equivalent to over 44.5 million units.

Immediately after, DRG registered to sell an additional 18.2 million DRI shares from July 10th to August 8th. If the transaction is successful, DRG’s ownership in DRI will be reduced to 36%.

DRG’s determination to sell its nearly 22.4 million registered DRI shares aligns with the company’s capital divestment strategy. Specifically, on May 27th, the DRG Board of Directors approved the goal of divesting nearly 22.4 million DRI shares at a starting price of VND 14,100 per share. Thus, if the divestment is successful, DRG could retrieve nearly VND 316 billion from this transaction.

Prior to this, DRG disclosed irregular information due to a notification from the Investigative Police Agency of Dak Lak Province regarding the prosecution of Mr. Bui Quang Ninh, Member of the Board of Directors and General Director of Dak Lak Rubber Joint-Stock Company.

Mr. Ninh was prosecuted for “Violation of regulations on the management and use of state assets, causing waste and loss occurring in the period of 2002 – 2012 at Dak Lak Rubber Company, now known as Dak Lak Rubber Joint-Stock Company.”

According to the company’s announcement, this issue concerning Mr. Bui Quang Ninh is related to his work at Dakruco, and it will be handled by the competent authorities in accordance with the law. The incident does not interrupt or affect the company’s operations or the common interests of the company and its stakeholders.

In 2024, DRG expects to achieve a total revenue of over VND 532 billion, including VND 259.32 billion from rubber sales, VND 129.55 billion from elastic thread products, VND 23 billion from hotel services, and VND 35.86 billion from fruit products. The expected profit before tax is VND 13.67 billion.

You may also like

Businesses Struggle as Companies Rush to Divest Investments in 2023

Taseco Land has withdrawn from the West Lake urban area project, while VNDirect Securities has sold its entire stake in IPAAM to IPA… These are among the notable divestment deals in 2023.

Prime Minister demands proposal to resolve difficulties for Vietnam Airlines in February

In February, the State Capital Management Committee was tasked with presenting a comprehensive plan to address the challenges faced by Vietnam Airlines due to the impact of Covid-19.

Capital withdrawal at VIMC, MobiFone, VRG: Potential to earn 50,000 billion VND

The Ministry of Planning and Investment (MPI) has submitted a proposal to the Government regarding the approval of a plan to restructure three state-owned enterprises (SOEs) under the State Capital Management Committee at Enterprises (SCMC) by the end of 2025. The three SOEs to undergo divestment are Vietnam Maritime Corporation (VIMC), Vietnam Mobile Telecom Services Corporation (MobiFone), and Vietnam Rubber Group (VRG).