Song Da Corp IPO to offer 220 million shares

The My Dinh Urban Area in Me Tri commune, Nam Tu Liem district, Hanoi - a real estate project developed by the Song Da Corp- Photo: VNA

The IPO will be held on December 25 at the Hanoi Stock Exchange. The shares will be sold at the starting price of 11,000 VND (49 US cents) per share. The shares offered at the IPO equal 49 percent of its charter capital, which is 4.5 trillion VND (200 million USD), or 450 million shares, the company said.

The company expects to raise more than 2.4 trillion VND from the IPO. It also plans to sell 822,000 shares to its employees at preferential prices. After the IPO, the Government will hold 51 percent of the company’s capital, but reduce it to below 50 percent by the end of 2019.

Song Da secured the Prime Minister approval in June to sell 135 million shares (30 percent of the charter capital) to its strategic investor and offer 84.77 million shares (18.82 percent of capital) at its IPO. The total amount of shares sold to the strategic investor and at the IPO in the previous plan would be equal to the amount of shares that Song Da plans to sell at its coming IPO.

Therefore, under the latest arrangement, the company would have no strategic investor. According to the company’s audited 2016 financial report, it had total assets of 31.9 trillion VND by the end of last year. Its owner equity was 7.83 trillion VND and total debts amounted to nearly 24.1 trillion VND, with short and long term loans amounting to 17.7 trillion VND. The infrastructure company posted consolidated revenues of 9.97 trillion VND in 2016 and net profit of the parent company was 359 billion VND in 2016, down 37 percent from the previous year.

In the first half of 2017, Song Da Corp recorded 9.9 trillion VND in combined revenue, a decline of 42 percent year on year. However, its six-month post-tax profits rose 30 percent year on year to 586 billion VND. Song Da Corporation is the main contractor for most hydropower projects in Vietnam. It is also involved in some major infrastructure projects including tunnels, highways and factories.

The company also plans to divest from several hydroelectricity companies this year, including the Ho Bon Hydropower Joint Stock Company, Nam Muc Hydropower JSC and Southern Power Investment & Development JSC.