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| Vinatex leader Vu Duc Giang visits Phong Phu Corporation in HCM City.— Photo Phongphucorp.com |
HA NOI (Biz Hub) — Deputy Prime Minister Vu Van Ninh has approved a proposal to increase Viet Nam Textile and Garment Group's (Vinatex's) holdings in Phong Phu Corporation to 51 per cent.
This proposal had been presented by the Ministry of Industry and Trade recently.
Earlier, under the group restructuring plan that was approved by Prime Minister Nguyen Tan Dung in February 2013, the company planned to hold less than half of the shares in the corporation.
This April, at the annual shareholder meeting, the corporation's shareholders agreed to give more shares to Vinatex. They also approved the merger plan of two companies, Phong Phu Fabric JSC and Phong Phu Home Textile SJC, with the corporation.
After the merger, Phong Phu Corporation will assume the two companies' rights and legitimate interests as well as take responsibility for their non-performing loans, labour contracts and other property obligations, which would no longer exist.
The merger is estimated to add VND77 billion (US$3.6 million) to the corporation's charter capital and take it over VND730 billion($34.6 million).
Besides the core business of textile production, the corporation has also worked in the field of real estate and financial investment.
Phong Phu Corporation General Director Pham Xuan Trinh told Biz Hub that the corporation was one of the largest enterprises in the Vietnamese textile industry. It gained total revenue of nearly VND4.6 trillion (US$219 million) and before-tax profit of VND280 billion ($13.33 million) in 2013.
The corporation is one of very few Vietnamese textile enterprises with a full "yarn-forward" chain in place – as required by Trans Pacific Partnership (TPP) regulations.
Trinh said that as a result, it would make the most of TPP's "yarn forward" or Rule of Origin regulation, in which members are required to use TPP member-produced yarn in textiles in order to receive full duty-free access.
Phong Phu Corporation currently produces yarn, towels, denim fabrics, and garments, as well as sewing thread of all kinds to serve the local market and to export to the European Union, the United States and Japan.—VNS