Due to the overloaded cold warehouse situation in the US, the Minh Phu Seafood Corporation is planning to build a 10,000 pallet cold storage facility in Los Angeles and another 10,000 pallet facility in New York to reduce costs. â Photo cafef.vn
Viet Namâs leading shrimp exporter Minh Phu Seafood Corporation has approved a plan to remove some of its non-core businesses to pave the way for foreign investors to buy more shares in the company.
During a shareholdersâ meeting on Saturday, the companyâs management board agreed to abolish its real estate, civil works, road freight and motor vehicle rental operations.
The move aims to allow foreign investors to own more than 51 per cent of its capital.
Minh Phu plans to issue nearly 76 million shares to investors through a private placement to raise its charter capital to VND2.16 trillion (US$92.3 million) from VND1.4 trillion.
The offering price will be no lower than the book value of the company in its latest financial statement and no less than the average closing price for 10 consecutive days prior to its filing to the State Securities Commission.
The share issue is expected in 2018-19. The proceeds will be used to strengthen the companyâs financial position as well as add more capital for production and business activities.
According to Le Van Quang, Minh Phu Seafood Corpâs chairman cum CEO, many investors had expressed an interest in the companyâs shares with ratios of 35 per cent, 30 per cent and 15 per cent.
One investor even wanted to buy 35.1 per cent of the companyâs capital and 15 per cent of his familyâs ownership to hold a 51 per cent stake. However, according to Quang, the investor was not satisfied with the share price, which he hoped to be at least 20-30 per cent higher than the market value.
Minh Phuâs shares are being traded at around VND47,000 ($2) on the Unlisted Public Company Market (UPCoM).
The company had established a goods production and processing process but was rather weak in B2C (business to consumer) activities, Quang said, adding that the company was seeking strategic investors with strong financial capacity to help expand its markets.
He disclosed two investors from the United States and Japan who wanted to invest in the company.
According to the company, China-US trade tensions were pushing breaded shrimp imports from China to the US from a zero tariff to a 10 per cent fee that will rise to 25 per cent by the year-end. Many US customers have asked Minh Phu to increase its sales to the US to offset falling imports from China.
The company has decided to build a $250-300 million breaded shrimp processing factory with annual capacity of 40,000 tonnes in Hau Giang Province. This factory, expected to be operational by 2020, will contribute more than 20 per cent to the companyâs total profits.
In addition, due to the overloaded cold warehouse situation in the US, the company is planning to build a 10,000 pallet cold storage facility in Los Angeles and another 10,000 pallet facility in New York to reduce costs. The company posted a nine-month revenue of VND12.6 trillion and net profit of VND681 billion, up 15 per cent in revenue and 58 per cent in profit compared to the same period last year.
It is planning to shift its listing to the Ho Chi Minh Stock Exchange early next year. â VNS