Cotec Land divests from units to restructure debts

Visual from Cotec Group's website

Real estate developer Cotec Land, a subsidiary of the Vietnam-based Cotec Construction Technology and Material (Cotec Group), has offloaded in its investee companies to restructure debt.

The company’s short-term debt in 2014 exceeded its short-term assets – $35.6 million compared to $23 million – and this has forced Cotec Land to reportedly divest from Cotec Healthcare and Cotec Asia Construction Investment and Tourism

On January 8, it sold 12.15 million shares, or a 25 per cent equity, of Cotec Healthcare to Viet Phuong Investment Group for VND121.5 billion ($5.65 million), implying the transfer price was at par the value of the stock.

As the deal was completed on January 29, Cotec Land became Cotec Healthcare’s affiliate company with a 40 per cent holding, which is worth VND194 billion ($9 million) in book value. Cotec Healthcare’s charter capital is VND486 billion ($22.6 million).

Cotec Healthcare launched last year, with Cotec Land being the founding shareholder. It is expected to build a spate of clinic facilities in Vietnam, and Cotec Land will be the contractor for its projects.

In addition, Cotec Land inked an agreement last month to sell 856,800 shares of Cotec Asia Construction Investment and Tourism to its mother company, Cotec Group, for nearly VND120 billion ($5.6 million). The offloaded stake accounts for 51 per cent of the invested firm’s charter capital. After this transaction, Cotec Land’s ownership in the company will stand at 44.6 per cent.

Last year, Cotec Land’s profit after tax reached VND8.2billion ($381,400), a decline by more than VND1 billion over 2013. It also targeted to double its charter capital to VND400 billion through public offer, a plan that had been actually set since 2012, but failed to attract buyers. Only 1.15 million shares were purchased, and the company managed to raise the capital to VND211.5 billion ($9.84 million).

The real estate developer had scheduled that from the intended additional VND200 billion ($9.3 million) from the public offer, over 60 per cent would be used to venture in building hospitals.

Running short of money, Cotec Land has not paid dividends for three years from 2012. Dividend payout for the year 2012, determined at three per cent, has been delayed until next month.

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.