Big players are flourishing

While most all local enterprises are struggling to mobilise capital given the difficult economic situation, a few lucky punters are considering the best way to benefit from their plentiful cash.

The conglomerate Hoang Anh Gia Lai (HAG), which had VND3.6 trillion ($173.9 million) in cash at last year’s finish, said it was willing to spending money on its big projects. Among them, its big-scale rubber planting plan was its first priority.

“How to spend in this difficult economic situation is a matter which needs much careful consideration,” said HAG’s chairman Doan Nguyen Duc.

Early this year, HAG had mobilised an additional $90 million via international bond issuance and is planning to mobilise $110 million more in order to finance its next projects.

Meanwhile, aquatic producer Hung Vuong Corp., which has VND190 billion ($9.18 million) in cash, is spending to acquire its weak peers.

Lately last month the company registered to purchase 2.8 million shares or 18.7 per cent stake of the near-bankrupt peer Faquimex (FBT) from State Capital Investment Corp. (SCIC), which will cost it some VND30 billion ($1.5 million).

Some sources familiar with the matter even indicated that HVG would bid for all the 4.92 million FBT shares held by SCIC and bought some more from the market, aiming at taking the control in FBT and merge the acquired company with itself afterwards. They said it would also spend more than VND1 trillion ($48.3 million) to raise FBT up after the acquiring finished.

Besides, HVG is also bidding 1.15 million shares of Agifish Co. (AGF), which exports tra fish into Russia. Observers said that the HVG would likely spend all its current cash in the two share purchases.

Dong Phu Rubber (DPR) is also among few “rich companies” at this moment with some VND600 billion ($28.98 million) in cash at Q1’s end. The rubber producer plans to strongly expand its scale, namely planting 2,540 hectares of rubber additionally and establishing a new rubber company covering 10,000ha.

In fact, Vietnamese enterprises are largely spending their cash in banks as home deposit interest rate is extremely high of more than 17 per cent. However, that way of spending is unstable as the rates could fall down unexpectedly and much impact enterprise’ plans, said chairman for Hung Vuong Corp. (HVG) Duong Ngoc Minh. – VIR

Tags: Vietnam companies, Vietnam enterprises