HÀ NỘI – Seafood processor Hùng Vương Joint Stock Corporation has agreed to sell its entire stake in Hùng Vương Sông Đốc JSC – its latest move to liquidate assets to pay debts.
In a filing to the Hồ Chí Minh Stock Exchange, management board of the company approved the selling of more than 3.2 million shares, accounting for 51 per cent in Hùng Vương Sông Đốc, but did not specify when the transfer would occur.
Hùng Vương has started to sell its assets since 2017 as part of debt payment rescheduling with creditor banks. Its total assets fell 36.7 per cent, from VNĐ13.9 trillion (US$596.6 million) in September 2017 to VNĐ8.8 trillion in March 2019.
The number of its subsidiaries and affiliates decreased from 13 by the end of 2018 to nine as of March.
The company has liquidated its real estate properties and decided to dissolve the An Lạc Real Estate in which it held 76 per cent of the capital last year. It also divested its entire ownership of 54 per cent capital in Sao Ta Foods, cut its stake in Việt Thắng Aquafeed from 90.36 per cent to 33.16 per cent and sold Tân Tạo Cold Storage 2.
Despite the sale of assets, the company is still in financial trouble, having received disappointing results from the 14th administrative review (POR14) for antidumping duty in the US with a tax of up to $3.87 per kg (compared to zero tax in the preliminary results).
Despite net profit of VNĐ6.7 billion in the first three months of this year, Hùng Vương is burdened with total debt of VNĐ6.63 trillion, of which short-term debt from banks is about VNĐ3 trillion.
The firm’s equity is VNĐ2.2 trillion and cumulative losses reached more than VNĐ398 billion.
Ernst & Young, the firm's auditor, has emphasised the business operation of the company depends on its ability to arrange cash flow, restructure bank debts and make profits in the future.
Cash flow from operating activities of the company was negative VNĐ107 billion in the first quarter of this year, a worsening situation compared to a positive cash flow of VNĐ557 billion in the same period last year.
Shares of the company, code HVG on the Hồ Chí Minh Stock Exchange, halved in value in a month after the POR14 result, dropping from VNĐ8,000 per share in mid- April to VNĐ3,700 each on Monday. — VNS
