Merger to be discussed at shareholder's meeting: Haraco

Tuesday, Jun 09, 2020 08:43

Passengers leave a North-South train operated by the Hanoi Railway Transport JSC. — VNA Photo

Details on a plan to merge the Hanoi Railway Transport JSC (Haraco) and the southern Saigon Railway Transport JSC (Saratrans) will be discussed at Haraco shareholders meeting next week, according to a letter from its board of directors.

"In order to improve the company's business efficiency, details on a plan to merge Haraco and Saratrans will be discussed at Haraco's upcoming shareholder's meeting, set to take place on June 15,” the letter stated.

Haraco, Saratrans and the Transportation and Trade JSC - a freight train specialist - form the country's largest railway transport business, the Vietnam Railways (VNR). With Haraco and Saratrans holding a dominant market share on railway passenger transport.

The merging is part of a VNR's effort to restructure its business and investments. VNR aims to recall some of its capital by cutting down its share and maintaining a 51 per cent share in the three companies.

Haraco's main transport routes including the Ha Noi - Hai Phong, Ha Noi - Dong Ðang, Ha Noi - Lao Cai and the North-South. The company began its equitisation in 2015 with a registered capital of more than VND800 billion (US$34 million). At the time VNR was its largest shareholder with 91 per cent. Haraco (HRT) has been registered on UPCoM since 2016.

Since equitisation - a process to convert a former State-own enterprise into a public company in Viet Nam - Haraco has reported large sales figures but with little to no profit to show for it. For instance, the company reported it net more than VND2.5 trillion in 2019 but only a small profit-after-tax of VND13.8 billion and a gross loss of VND71 billion.

Last year, the company's sale target was set at more than VND1.6 trillion with a projected loss of VND355 billion. Haraco has made sizable investments in an effort to renew its fleet with the largest project to-date to build an additional 200 cars at a cost of over VND550 billion.

Saratrans held its shareholder's meeting last month but made no note of the merger plans. — VNS

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