VietNamNet Bridge – There is a growing tendency of companies quitting the stock market to escape the “big sharks” who try to swallow them. Many others disapprove of listing shares on the bourse for the bear of being taken over one day.
“Shrimp king” runs away
The information about Minh Phu’s delisting has stirred up the public over the last week. A lot of Minh Phu’s shareholders have been seeking to sell their shares, possibly because they have foreseen the fate of the company – one of the biggest seafood groups in Vietnam.
Explaining the delisting, Minh Phu’s senior executives have reasoned the pressure from the foreign shareholders, the liquidity and the lack of capital for long term investment projects. However, the explanations did not reduce the public’s curiosity.
Minh Phu (MPC) now has two foreign investors, Red River Holding and Vietnam Investment Fund, which hold 16 percent of the company’s chartered capital. The two biggest shareholders of the company, Le Van Quang and his wife Chu Thi Binh, now hold 48 percent of stakes. As such, they are still the real biggest owners of MPC.
Regarding the financial health, the 2012 company’s finance report showed that the cash flow was still healthy with VND1,260 billion in cash and assets.
People believe that the real reason behind the delisting is that MPC has decided to “play in the defense.” One year ago, Thai CP Foods Group expressed its intention of buying 40 percent of stakes of Minh Phu. At that time, Minh Phu refused the deal, though it really needed capital, because while it was negotiating about the contract, Minh Phu obtained some orders.
However, the most important reason was that CP Foods tried to set some terms which showed their ambition of taking over Minh Phu – the thing that MPC’s General Director Le Van Quang did not want.
Sources said that Quang has vowed to retain MPC at any cost and to transfer the company to his daughter.
The wave of delisting
Minh Phu is not alone. A lot of other companies have been running away from the stock market to avoid the inquisitive eyes from foreign big “sharks.”
A lot of big names have delisted over the last year — namely Alphanam, an investment company, Mekophar, a pharmacy manufacturer, the Song Da construction and investment company, Viet Hai, a shipping and real estate firm, Go Dang Company and Vinafco.
The Saigon Maritime JSC (SHC) at which Phu is also the Chair of the Board of Directors with 16 percent of stakes, would have to stop listing from May 21 after a period of incurring loss.
In principle, the delisting would badly affect the companies’ capital mobilization plan and shareholders’ benefits (they would find it more difficult to transfer stocks). However, Nguyen Xuan Phu, Chair of Sunhouse, a household appliance manufacturer does not think delisting is a bad thing.
Phu said that it is very difficult to seek capital in the stock market at this moment; therefore, the listing on the stock market now does not bring high benefits. Regarding the stock transfer, Phu said he would be willing to buy back all the shares from investors at the market price.
As for Sunhouse, Phu still plans to list the shares on the bourse, but he would only do this when he can see the favorable market conditions.