Friday, 19 Jan 2018

Vinachem forced to divest from 4 projects sustaining millions of USD loss

Updated at Sunday, 07 Jan 2018, 15:05
The Hanoitimes - Under the newly-approved restructuring plan, the Vietnam National Chemical Group (Vinachem) will be allowed to hold over 65% shares at Apatite Vietnam.
The Deputy Prime Minister Vuong Dinh Hue has signed the Decision approving the restructuring plan of Vinachem in period 2017 – 2020, as such, Vinachem will hold less than 50% stakes in seven companies and sell all of its stakes in 15 other companies. 
Vinachem is expected to start its equitization process in period 2018 – 2019.
Vinachem is expected to start its equitization process in period 2018 – 2019.
From now on, Vinachem will scale down its business lines to producing and trading basic chemicals; exploiting and processing minerals as raw materials for fertilizer and chemical production; producing and trading pesticides and fertilizers containing phosphorus.

Specifically, Vinachem will have to divest all state fund from companies such as Ha Bac Nitrogenous Fertilizer and Chemical JSC, DAP-Vinachem JSC, DAP No. 2 – Vinachem JSC and Ninh Bình Nitrogenous Fertilizer and Chemical Co., Ltd in case these companies recover from losses and start having profitability. Currently, Vietnam Apatite Vietnam is the only company for which Vinachem is allowed to hold over 65% of its chartered capital. 

In addition, Vinachem will hold from over 50% to less than 65% of charter capital of seven companies including the Industrial Gases and Welding Electrode JSC, Viet Tri Chemicals JSC, the Southern Basic Chemicals JSC, Lam Thao Fertilizers and Chemicals JSC, Van Dien Fused Magnesium Phosphate JSC, Ninh Binh Phosphate Fertilizer JSC and Vietnam Pesticide JSC.

Vinachem will hold less than 50% of charter capital in nine companies, namely Southern Rubber Industry JSC, Da Nang Rubber JSC, Sao Vang Rubber JSC, Binh Dien Fertilizers JSC, Can Tho Fertilizers and Chemicals JSC, the Southern Fertilizers JSC, NET Detergent JSC, LIX Detergent JSC and Dry Cell and Storage Battery JSC.

Vinachem will withdraw its entire capital from the following 15 companies,namely Hanoi Soap JSC, Vinh Phu Battery JSC, Tia Sang Battery JSC, Inoue Rubber Vietnam Co., Ltd, TPC VINA Plastic and Chemical Co., Ltd, South Chemicals Import – Export JSC, Hanoi Synthetic Paint JSC, Duc Giang Chemicals and Detergent Powder JSC, Hanoi Batteries JSC, Viet Nam Chemical Import & Export JSC, Ninh Binh Fertilizer Port JSC, Tay Ninh Chemical Industry JSC, Da Nang Chemicals Industry JSC, Mine Construction and Investment Consultancy JSC and Chemical Engineering Joint Stock Corporation.

Vinachem’s members such as Vietnam Institute of Industrial Chemistry will be equitized and the College of Chemical Industry will also be scaled down for efficient operation.

After completing the restructuring and divestment plan, it is expected that Vinachem will increase its chartered capital to 20 trillion VND (roughly US$ 878 million), Vinachem then starts its equitization process in period 2018 – 2019, for which the government will hold 50 – 65% of its chartered capital. 

In the first half of 2017, Vinachem recorded revenue of nearly VND 21 trillion (US$ 922 million), which is equivalent to last year’s revenue and sustain loss of VND 192.7 billion, or US$ 8.5 million. Meanwhile, in 2016, Vinachem had revenue of approx. VND 39 trillion (US$ 1.7 billion), but still having loss of nearly VND 1.3 trillion (US$ 57 million).
Ngoc Thuy
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