Pomina's board of directors finalized a plan to sell nearly 70.2 million shares to Nansei Steel at VND10,000 per share, about 45% higher than the market price.
Nansei Steel is a manufacturer and exporter of metals (mainly steel) headquartered in Chiba Prefecture, Japan. This enterprise established a legal entity in Vietnam only half a year ago.
Information about the offering announced by the Board of Directors of Pomina Steel Joint Stock Company (stock code: POM) this morning immediately affected the market price on the stock exchange. From the reference level of 6,900 VND, this stock jumped to the ceiling of 7,390 VND and there were no sellers.
Pomina plans to split the offering into two rounds for Nansei Steel to raise more than VND700 billion for production and business activities. The first round will be in August with more than 10.6 million shares offered, the rest will be offered a year later. The Japanese partner will be restricted from transferring shares in the first three years.
Currently, Pomina has only one major shareholder, Viet Steel Trading and Production Company Limited, with a ownership ratio of more than 53.3% of capital. If the offering is completed, Nansei Steel will be the second largest shareholder holding 20% of Pomina's capital.
Pomina is in a difficult financial period. Last year, the company lost nearly VND1,100 billion after tax and lost another VND186 billion in the first quarter of this year. According to Mr. Do Tien Si - General Director of the company, the sluggish real estate market has led to a sharp decrease in steel consumption demand and the cost of the newly put into operation blast furnace project is the main reason for the company's loss.
Pomina initially expected to make a profit of VND300 billion this year. However, in the updated annual shareholder meeting document, the company predicted that real estate would not improve, so it maintained a cautious view on the steel industry's prospects and adjusted its target to a loss after tax of VND150 billion. According to the board of directors, the cooperation with Nansei Steel will help the company have enough financial resources to meet demand when the market recovers strongly from the middle of next year.
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