Gelex mulls capital increase via share issuance

Monday, Dec 21, 2020 06:30

Viet Nam Electrical Equipment Corporation's headquarters in Ha Noi. — Photo

Viet Nam Electrical Equipment Joint Stock Corporation (Gelex) plans to issue nearly 293 million shares to increase charter capital.

The shares will be sold to current investors. Each share is equal to one purchase right and every shareholder will have the right to purchase six new shares for each 10 rights they have.

Gelex will set the price at minimum VND12,000 (US$0.52) apiece, hoping to raise more than VND3.5 trillion ($151.4 million) from the sale to raise charter capital to VND7.8 trillion.

The deal will be discussed at the firm’s extraordinary shareholder meeting on December 29. If approved, it will be done by the end of June 2021.

In recent years, Gelex has continuously made borrowings to expand operations and enhance investments.

Those loans helped the company raise revenues annually from VND8.6 trillion in 2015 to an estimate of VND17.5 trillion in 2020.

Gross profit also rose from VND1.1 trillion in 2015 to an estimated VND2.5 trillion in 2020.

However, financial expenses soared from VND75 billion ($3.24 million) in 2016 to an estimated VND1 trillion in 2020, mostly because of the firm’s acquisition of Viglacera Corporation.

After the acquisition completes in 2021, total revenue and gross profit are expected to reach VND33.4 trillion and VND5.2 trillion in 2021, respectively.

Earnings per share (EPS) is forecast to rise to VND1,500 apiece in 2021 from an estimate of VND1,348 apiece in 2020.

The upcoming capital increase will serve the group’s planned projects such as two wind power projects in Quang Tri Province and two hospitality projects in Ha Noi.

In addition, Gelex plans to widen its working capital by VND415 billion and spend VND800 billion restructuring and increase capital for its subsidiary Gelex Electrical Equipment JSC.

In July-September, Gelex reported nearly VND4.75 trillion of net revenue, up 21 per cent on-year, and VND218 billion in post-tax profit, down 5.2 per cent on-year.

In January-September, the corporation earned a combined net revenue of total VND12.06 trillion, an annual increase of 9.6 per cent.

Nine-month post-tax profit dropped 7.89 per cent on-year to VND641 billion.

Gelex is listing more than 488.2 million shares on the Ho Chi Minh Stock Exchange with code GEX.

The company’s shares edged up 0.5 per cent to end Friday at VND20,800 apiece.

Recently, Gelex has decided to sell 12 million treasury shares to employees at VND12,000 apiece. — VNS

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