Raising capital for investment and financial restructuring
On February 5, the Investment and Industrial Development Corporation (Becamex IDC - stock code BCM) announced the starting price for the public offering of 300 million BCM shares through a public auction at HoSE. SSI is the advisory unit for the issuance. The Board of Directors (BOD) of Becamex IDC decided on the starting price of VND69,600/share, the total value of capital mobilized at the starting price is VND20,880 billion. This price is equivalent to the current market price of BCM shares.
By the end of 2024, the company's charter capital will be VND10,350 billion and equity VND20,480 billion. Thus, if capital mobilization is successful after the public auction, the charter capital will increase to VND13,350 billion but equity will double to more than VND41,000 billion.
Regarding the plan to use mobilized capital, Becamex IDC plans to use VND6,300 billion to invest in the Cay Truong Industrial Park project (VND2,800 billion), Bau Bang Industrial Park expansion (VND3,500 billion); VND3,634 billion to contribute capital to existing companies including Vietnam - Singapore Industrial Park Joint Venture Company Limited (VND2,118 billion), Becamex Binh Phuoc Technical Infrastructure Development Joint Stock Company (VND900 billion), Becamex - VSIP Power Investment and Development Joint Stock Company (VND216 billion), Vietnam - Singapore Smart Energy Solutions Joint Stock Company (VND200 billion), Becamex Binh Dinh Joint Stock Company (VND200 billion); and VND5,066 billion to restructure finances to repay bonds and bank loans. As of the end of the session on February 7, Becamex's foreign room was 31.77% empty, equivalent to more than 330 million shares.
Two consecutive times of "unsold" large amount of shares offered to the outside
It is worth noting that, despite owning large assets and many famous industrial parks nationwide, Becamex IDC witnessed two sluggish stock offerings from late 2017 to early 2018.
In particular, the initial public offering (IPO) on December 1, 2017, Becamex IDC failed miserably with only 19 million shares, accounting for 6.1% of the total of more than 311.2 million shares auctioned.
On January 3, 2018, Becamex IDC continued to offer shares to the public for the second time, selling 5.1 million shares at a starting price of VND31,000/share out of a total of 296.46 million shares offered. Thus, after the two previous auctions, Becamex IDC only sold a total of more than 24 million shares, equivalent to 7.7% of the total 311.2 million shares offered, earning a total of VND745 billion.
Meanwhile, the corporation itself has a high debt/equity ratio, large debt scale and low business efficiency on investment capital of BCM are also factors that make investors concerned. The recently announced 2024 financial report of Becamex IDC shows that in the fourth quarter of 2024, Becamex IDC recorded net revenue of nearly 2,000 billion VND, down 60% over the same period, due to the main source of revenue from real estate business, investment real estate decreased by 71% to more than 1,334 billion VND; while construction revenue was nearly 183 billion VND, 8.7 times higher. Accumulated for the whole year, net revenue was more than 5,195 billion VND, down 34% and profit was more than 2,105 billion VND, down 13% over the previous year. Compared to the plan, this giant of Binh Duong Industrial Park has only achieved 60% and 98% respectively. The remaining debt is nearly 38,298 billion VND, an increase of 13%. That shows that Becamex IDC's capital demand to pay off its debt is currently very large.
Is the divestment "game" gradually losing its appeal?
Becamex IDC is a company with large assets and many industrial and commercial real estate projects nationwide, so Becamex IDC has become one of the notable businesses for investors whenever there is information about divestment. However, according to financial experts, with the capital sale ratio and the State still owning the controlling stake, this also creates concerns. According to the prospectus, as of November 5, 2024, Becamex's shareholder structure is quite concentrated with the largest shareholder being the People's Committee of Binh Duong province holding 95.44%. In May 2024, the Prime Minister issued Decision No. 426 approving the reduction of State capital at Becamex from 95.44% to 65% by the end of 2025. This is the basis for State shareholders to sell capital and reduce ownership in this enterprise.
Investors are more or less worried that when the State still controls operations and management, and more specifically, with such a large scale, capital sale cannot be simply bought by small shareholders but only large-scale organizations can participate.
Discussing further about the "game" of State capital divestment, Dr. Nguyen Duy Phuong, Director of Strategic Investment of DG Capital, said that a very important point for the equitization story that investors like is the room for improving profits after equitization. The leading role of strategic investors is likened to a new wind that encourages businesses to improve operational efficiency, creating higher surplus value. However, information about the time of selecting strategic investors of Becamex IDC has not yet been announced in detail, such as the conditions for participation, the implementation process as well as the time to find strategic investors.
