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.