Vietnam Steel Corporation – JSC (VNSteel – code TVN) has just announced a resolution to divest all 9.87 million shares, equivalent to 65% of the capital of Vietnam Steel Corporation – Vicasa JSC (code VCA).
There are two possible approaches to the divestment of Vicasa Steel. The first option is to transfer the shares through a matched order transaction on the HoSE exchange. The second option is to transfer the shares through an off-exchange transaction (public offering of a public company’s shares through a public auction), including a conventional public auction and a public auction by lot.
VNSteel shared that, after studying the company’s operations and evaluating the strengths and weaknesses of the above methods, the transfer of capital through a public auction by lot has several advantages over the other methods.
Therefore, the General Director agreed to choose the method of transferring shares through an off-exchange transaction, a public offering of shares through a public auction by lot. The starting price for the offering is VND 238 billion per lot of shares, equivalent to the practical value of VND 24,158 per share after the appraisal of Vietnam Audit and Valuation LLC.
The process will involve a public auction, and if that is not successful, a competitive offering will be made. If the competitive offering also fails, a negotiated method will be used. The divestment is expected to start in November and be completed by the first quarter of 2025.
VNSteel is the largest state-owned enterprise in the steel industry, with a charter capital of nearly VND 6,800 billion. The State Capital Investment Corporation (SCIC) holds over 93% of the shares. Meanwhile, in addition to VNSteel, Vicasa Steel also has another major shareholder, Danang Steel Joint Stock Company, which holds 7.14% of the capital.
Following the news of the parent company’s divestment at a high price, VCA shares surged to the ceiling price of VND 9,090 per share on November 28, with no sellers. However, this market price is still much lower than the expected divestment price of VNSteel.
In terms of financial performance, in the first nine months of the year, Vicasa Steel recorded VND 1,013 billion in net revenue, a 19% decrease compared to the same period last year. After expenses, the company reported a loss of VND 1.5 billion, while in the same period last year, it made a profit of VND 3.5 billion.
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