ASEAN KEY DESTINATIONS
Vietnam's steel firm to go public, boost capital base
A major Vietnamese steel pipe maker, valued at nearly $9 million, plans to issue new shares to boost its capital base by 80 percent following its Hanoi market debut early next month, Reuters quoted an executive as saying Wednesday.
Viet-Duc Steel Pipe Co, based in the northern province of Vinh Phuc near Hanoi, will list all of its 7 million shares on Dec. 4 and set a starting price of 25,000 dong ($1.52), Deputy General Director Do Thanh Tung said told Reuters.
Viet-Duc's steel pipe output makes up 15 percent of the domestic market, making it the country's leading manufacturer of the product, Tung said.
Shares in the company were last traded early last month on the unregulated, unofficial markets at 20,000-22,000 dong each, down 10 percent from late September.
After its market debut, Viet-Duc will issue 5.6 million new shares to existing shareholders in December to raise its registered capital by 80 percent to 126 billion dong, Tung said without giving further details.
Vietnam's steel market saw a slight recovery this month with monthly consumption rising to 305,000 tonnes from 120,000 tonnes sold last month and 102,000 tonnes in September, state-run media quoted the Vietnam Steel Association estimates as saying.
The steel market recovery followed a series of price reductions in recent months to deal with mounting stockpiles, while banks also softened lending rates thanks to three rate cuts by the central bank since Oct. 21.
Tung said the company's net profit was nearly 23 billion dong ($1.4 million) in the first nine months of the year, 1 percent above the target for the whole of 2008, as nine-month revenues doubled those for the whole of 2007 to 1 trillion dong.
Viet-Duc boosted steel pipe exports to the European and American markets, which generated 40 percent of the company's total revenues, Tung said.
Viet-Duc has planned to raise the export revenues from the two markets to 50 percent of revenues in 2009 when its net profit is projected to rise one third to 32 billion dong, Tung said.
In late September Viet-Duc expanded its annual production capacity by six-fold to 350,000 tonnes, Tung said.
"We are confident in reaching the 2009 targets thanks to new capacity," he said.
The Hanoi Securities Trading Center ended 5.4 percent lower at 99.56 points, above its life low of 98.87 points reached on October 28. The index has fallen 70 percent this year.
The exchange said it now trades shares in 162 companies with a total market capitalisation of nearly $4 billion.