Pomina’s extraordinary general meeting took place on the morning of March 1st.
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Identity of new investors not yet disclosed.
At this general meeting, shareholders are eagerly awaiting the identity of the new strategic investor. However, a representative from Pomina stated that the information about the new investor cannot be published yet as the negotiation process is still ongoing.
“The figures in the proposal are still being negotiated for the final stage. The investor is still not ready to disclose their identity. Therefore, the specific name cannot be announced. After the negotiation process is complete, we expect to announce the identity of the investor at the annual general meeting scheduled for the end of April 2024,” a representative from Pomina said.
Sharing about the new investor, Chairman Do Duy Thai said that this is a large corporation with a strong presence in the steel industry.
“When choosing a strategic investor, we consider many aspects that can bring added value to the company. That is the main objective. We are certain that we must choose an investor who shares the same corporate culture, has integrity, and most importantly, can bring added value to the company,” Chairman Thai said.
Pomina will not control the new company.
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With this plan, Pomina will terminate the business registration of its subsidiaries Pomina 1 and Pomina 3. In addition, Pomina is also negotiating with the new investor to merge Pomina 2 into Pomina Phu My Joint Stock Company to take advantage of the blast furnace and reduce production costs. |
According to the restructuring plan for shareholders, Pomina will establish Pomina Phu My Joint Stock Company together with the new investor. The new company is expected to have a charter capital of about 2,700-2,800 billion VND and bank loans of 4,000 billion VND, and will use Pomina’s brand and distribution system.
It is worth noting that although the name contains “Pomina”, the new company will not be controlled by Pomina.
Pomina is expected to contribute 35% of the charter capital, equivalent to 900-1,000 billion VND, and the new investor will contribute 65%, equivalent to 1,800-1,900 billion VND.
In this deal, Pomina will contribute assets such as land, factories, and equipment from Pomina 1 and Pomina 3, while the new investor will contribute money.
Due to the higher value of the two plants compared to the planned capital contribution, Pomina expects to partially recover its capital from the new legal entity.
Based on the asset valuation results by the auditing company AFC and Savills, the estimated value of the assets of Pomina 1 and Pomina 3 to be contributed to Pomina Phu My Joint Stock Company is 6,694 billion VND (excluding 10% VAT), with Pomina 1 valued at 336.4 billion VND and Pomina 3 valued at 6,357.6 billion VND.
Regarding Pomina’s part, they estimate the value of these two plants to be from 6,000 to 6,800 billion VND. Therefore, the company expects to recover about 5,100-5,800 billion VND from the new legal entity after deducting the planned capital contribution (900-1,000 billion VND).
Pomina said that the recovered amount from the new legal entity will be used to repay bank debts (short-term and long-term) of about 3,757 billion VND and repay debts to suppliers of about 1,343 billion VND.
Sharing the reason for the restructuring, Chairman Thai said that the main goal is to strengthen the financial position and have capital to restart the blast furnace in preparation for the recovery phase in the fourth quarter of 2024. “If this process is completed, the blast furnace will start operating again from the third quarter of 2024 and generate profits from the fourth quarter,” he said.
The revenue of Pomina Phu My can reach 14,000-15,000 billion VND
In addition, relocating the production line to the Phu My plant will contribute to reducing the production costs of the company.
“Previously, the company had to transport hot metal from Phu My to Pomina 1, causing the metal to cool down. While the new plan will maintain a higher temperature, thus reducing the cost by about 450,000 VND per ton, thereby increasing competitiveness in the market and increasing profits in the coming years.
Reducing the cost of transporting hot metal to Pomina 1 by 450,000 VND per ton is a persuasive factor for the new investor. When completed, the company will be able to reduce costs and is expected to operate at full capacity, producing about 1 million tons per year,” said CEO Do Tien Si at the general meeting.
