Ocean Group may buy PVX real estate holdings

Read the original news 

VietNam News English - 27 month(s) ago 11 readings

Ocean Group (OGC) has offered to buy the entire real estate holdings of PetroVietnam Construction Corporation (PVX) in a deal estimated to be worth about VND600 billion (US$28.6 million), according to PVX CEO Trinh Xuan Thanh.

HA NOI —

"They have sent us an offer and we have also submitted the proposal to [PVX parent company] PetroVietnam for consideration," Thanh told newspaper Dau tu Chung khoan (Securities Investment).

According to the latest PVX disclosures, PVX has 15 subsidiary companies and 13 affiliated companies operating in the fields of industrial and civil construction and real estate investment. However, the company has been planning to divest from the real estate sector in 2013.

According to estimates of market insiders based on the share values, PVX share holdings in other companies, including PetroVietnam Capital Infrastructure Investment (PTL), PetroVietnam Premier Recreation (PVR), PetroVietnam Power Land (PVL) and PetroVietnam Dong Do (PFL), are worth over VND1 trillion ($47.6 million).

However, Government regulations currently forbid State-owned companies from selling State capital at below par value, and Thanh affirmed that PVX would not carry out the deal if the divestment brought in losses.

If so, why only VND600 billion for the whole deal?

Ocean Group CEO Ha Van Tham also confirmed to Dau tu Chung khoan that the group planned to pay VND600 billion to acquire PVX's interests in property projects, but he did not provide more information.

Market insiders have raised concerns over the financial capacity of Ocean Group, which, by the end of March, reported cash holdings of just VND96 billion ($4.6 million) and total liabilities of nearly VND5 trillion ($238 million), of which VND2.25 trillion ($107 million) is short-term debt.

However, earlier last year, OGC was able to raise VND700 billion ($33.3 million) through an issue of three-year bonds, and the group continues to plan to increase its charter capital this year from VND3 trillion ($143 million) to VND5 trillion ($238 million).

OGC aims to promote its mergers and acquisation (M&A) efforts, focusing on the real estate, food processing, hospitality and tourism sectors. In 2011, Ocean Hospitality and Service Co (OCH), a member of the Ocean Group, initiated the scheme by purchasing major stakes in many hotels around the country.

The deal has raised market concerns about behind-the-scene interests on both sides of the proposed deal. However, PVX closed last Friday unchanged at VND9,700, while OGC closed 0.8 per cent off to VND12,200 per share. — VNS

There is no comment

Please Sign up or Login to comment.

Top page