The Ministry of Agriculture and Rural Development (MARD) has valued the Vietnam Rubber Group (VRG), the country’s largest rubber company, at VND4 trillion (US$177.78 million), not including its land, marking another step toward its equitisation by the end of 2017.
Rubber latex being harvested by workers at Binh Phuoc Province-based Dong Phu Rubber Co, an affiliate of the Vietnam Rubber Group.
According to a decision signed by MARD last week, the company will submit its equitisation plan to the Government this month. VRG missed the deadline for its initial public offering (IPO), which was scheduled for July 2017.
According to deputy minister Ha Cong Tuan, the reason for the delay is the Government’s desire for the IPO to be audited by the State Audit of Viet Nam to ensure the State capital in the company is protected.
As VRG has a large area of land property, which covers 420,000ha in Viet Nam, Laos and Cambodia, the audit must be carried out carefully, Tuan said. “This is such a big advantage for VRG and the profit brought by the large area of land could be huge in the future.”
“It will take months to collect feedback from other ministries and sectors on the equitisation plan of VRG, but we have to be careful to preserve the State capital in the company,” said Tuan.
Nonetheless, deputy minister Tuan and VRG deputy general director Huynh Van Bao assured local media that the company will complete its equitisation by the end of this year and start running as a joint-stock firm in 2018.
In addition to careful inspection of VRG’s land property, the IPO has also been delayed by the search for a strategic investor with specialised knowledge and understanding of the agricultural sector and the same vision as VRG.
Deputy minister Tuan and the firm’s general director ??? Thuan told Dau Tu (Investment) newspaper that it was hard to find such a potential investor who can also spend around VND5-10 trillion to purchase part of the Government capital. The company’s charter capital as of December 21, 2015 was VND26.16 trillion.
VRG has maintained good performance on rising rubber prices. The rubber price on the Tokyo Commodity Exchange gained 0.1 per cent to finish Friday trading at 221.4 yen per kilogramme.
In the first six months of 2017, VRG posted VND8.1 trillion in revenue and VND1.5 trillion in post-tax profit, increases of 46 per cent and 169 per cent from one year ago. The figures helped VRG complete 33 per cent and 47 per cent of its targets for 2017.
