Song Da Corporation, a construction firm in Vietnam is looking to conduct an initial public offering in 2019 following the approval by the country’s Prime Minister.
The Prime Minister has given the corporate authorization to set up criteria in choosing strategic investors, in addition to handling land issues, paying annual land lease fees, and implement the management and use of land in line with respected regulations.
This move from the Song Da Corporation is made with the intent to push its state-owned enterprises to privatize and boost performance. The process has especially gained momentum since a new government took office last year.
The leading infrastructure company plans to dispose parts of its government ownership and issue new shares to increase its registered charter capital to 4.5 trillion dong (about US$198.34 million).
This plan will allow the business to launch an IPO with 450 million shares for 10,000 VND each (about US$0.44), while the State continues to retain 229.5 million shares, making up 51 percent of the charter capital until the end of 2019.
Meanwhile, 822,000 preferential shares or 0.0183 percent of the charter capital will be sold to company’s staff and an allocated 30 percent stake will be sold to strategic investors. The remaining interest will be provided to the public in the IPO.
Following the IPO, the government will then reduce its stake to below 50 percent of the total charter capital in 2020.
Established in 1961, Song Da Corp is based in Hanoi. The firm is the main contractor for most hydropower projects in Vietnam and has also built major infrastructure including tunnels, highways, factories as well as real estate mixed-use complexes.
The company’s total laborers at the time of announcing the corporation’s value stood at 464 people, 412 of whom will move to work at Song Da Corporation-Joint Stock Company and the remainder will leave the company.
This news is published on Reuters.