Haxaco in talks with South Korean firm to offload half of shares

Friday, Oct 18, 2019 10:16

A Haxaco technician checks a car engine. The company is in talks to sell 51 per cent of its shares to South Korea-based firm The Class Hyosung. — Photo haxaco.com.vn

Hang Xanh Motors Service Joint Stock Company (Haxaco) is in talks to reach a share purchasing deal with The Class Hyosung.

In a non-binding offer sent to Haxaco, The Class Hyosung – a member of the South Korean conglomerate Hyosung Group – asked to buy more than 51 per cent of the Vietnamese firm.

The bidding price of The Class Hyosung was reported at VND45,500 (US$1.95) per share.

The South Korean firm must make a public offer as regulated to guarantee the rights and benefits of all shareholders, Haxaco said in a filing to the Ho Chi Minh Stock Exchange (HoSE).

Haxaco has set the asking price at a minimum of VND50,000 per share. The Vietnamese firm is listing 36.7 million shares on HoSE as HAX.

Its shares surged 6.9 per cent on October 17 to end at VND21,750 per share – which is a 56.5 per cent discount from the company’s asking price.

The company shares have soared nearly 23 per cent in the last four trading days and as much as 50 per cent since the beginning of the year.

The HCM City-based auto dealer has also set up a special unit, made up of five key members to handle negotiations with The Class Hyosung.

The unit includes two deputy general directors, the chief finance officer and an accountant. The unit has to look for a securities firm for consultancy and has to assure the rights and benefits of all shareholders, Haxaco said in the filing.

The negotiation must be reported to the board of directors and the deal will be discussed at any shareholders’ meeting until the next annual shareholders’ meeting in 2020, the company said.

Haxaco is planning to lift the foreign ownership limit to 100 per cent from current 44 per cent so that the firm can attract more foreign capital.

In the first six months of 2019, Haxaco earned VND2.37 trillion ($101.9 million) of net revenue, up 9.4 per cent year on year. But its pre-tax profit fell 16.8 per cent yearly to VND38.75 billion in the period due to increased competition in the Vietnamese automobile market.

The company has not released its third-quarter earnings report yet.

According to Viet Dragon Securities Corporation (VDSC), Viet Nam’s automobile market will continue rising in 2019 as the market demand remains high and the number of high-income consumers is increasing.

VDSC projects total sales volume of Haxaco will gain 15 per cent year on year to 2,700 units in 2019.

Haxaco has been the official dealer of Mercedes-Benz automobiles for the German car manufacturer Daimler AG since 2004. — VNS

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