Vietnam has raised VND664 billion ($29.2 million) from the auction of its 93 per cent stake in Vietnam Sugarcane and Sugar Corporation II (Vinasugar II) on Ho Chi Minh City Stock Exchange (HoSE) on February 13. The proceeds were in line with the government’s expectation.
The auction attracted seven investors, including five individual investors. The highest bid volume reached 13.65 million shares.
Vinasugar II now has a charter capital of VND685 billion ($30.14 million). It is engaged in manufacturing sugar, starch, and packaging; providing technical services for sugarcane and consulting services, financial investment and commercial and real estate business.
The auction of the sugar producer was successful as opposed to its peer under the Ministry of Agriculture and Rural Development, Vietnam Rubber Group (VRG). The government raised VND1.31 trillion ($57.7 million) from the rubber firm’s IPO, far lower than its expectation of raising at least VND6.2 trillion ($273.1 million).
In 2016, Vinasugar II’s revenue stood at VND448.7 billion ($19.7 million), while after-tax profit was VND29.9 billion ($1.3 million). The company expects to have garnered VND462 billion ($20.3 million) in revenues and nearly VND16.5 billion ($7.26 million) in after-tax profits in 2017.
Sugar manufacturers in the country are worried due to the impending implementation of the ASEAN Trade in Goods Agreement (ATIGA) that will eliminate quotas and reduce tariffs on all sugar imported from other ASEAN countries.
Le Van Dong, Chairman of the Board of Vinasugar II, cautioned, “2018 is predicted to be a difficult year for the sugar industry in general and the company in particular.”
In Vietnam, Thanh Thanh Cong Tay Ninh Sugarcane JSC (TTCS) has been a major brand in the production and supply of sugar for many years. Last November, Vietnam’s largest dairy producer officially set foot in the sugar industry by purchasing a 65 per cent share in the Khanh Hoa Sugar Joint Stock Company, renaming it Viet Nam Sugar JSC (Vietsugar).