Deputy Prime Minister Vuong Dinh Hue has approved the equitisation plan of Viet Nam Southern Food Corporation (Vinafood 2).

Vinafood 2’s charter capital is VND5 trillion (US$220 million), of which, the State will hold 255 million shares, representing 51 per cent of charter capital after the equitisation. The Ministry of Agriculture and Rural Development will be the representative of State ownership in the company following the equitisation.

The number of shares offered in the initial public offering (IPO) is over 114.8 million shares, representing 22.97 per cent of the charter capital. The starting price of the IPO is VND10,100 per share.

Nearly five million shares will be sold to employees, equivalent to 0.99 per cent of charter capital. The stake sold to the trade union organisation at the enterprise is 200,000 shares, representing 0.04 per cent of the charter capital.

Strategic investors will be able to purchase 125 million shares, representing a quarter of Vinafood 2’s charter capital.

According to Vinafood’s invitation to investors, strategic investors must have total assets of at least VND10 trillion, minimum chartered capital of VND3.5 trillion and record positive after-tax profit in three consecutive years with no accumulated losses by the end of 2015.

Strategic investors must also commit to co-operate with the corporation in implementing agricultural restructuring, linking with farmers to form a value chain in rice production and export.

Vinafood 2 specialises in processing and trading food, importing and exporting agricultural products, and storage. The company currently owns the distribution system throughout the southern provinces of Viet Nam.

However, the firm is facing a number of financial difficulties. According to the report released at the end of June 2017, the company had total assets of some VND8.8 trillion and long-term loans of VND3.77 trillion. The equity and accumulated loss of the company were recorded at VND3.89 trillion and VND912 billion, respectively.

In the first half of last year, Vinafood 2 reported a loss of VND118 billion while it gained VND156 billion in profits in 2016 and VND136 billion in 2015. — VNS