PDR Chairman Nguyen Van Dat was questioned about whether issuing shares at too low a price would cause shareholders to suffer losses, but he said he himself suffered the most.
The 2023 Annual General Meeting of Shareholders of Phat Dat Real Estate Joint Stock Company (PDR) on June 30 voted on the company to issue 67.16-134 million PDR shares to professional securities investors and existing shareholders at a selling price of VND10,000 per share. The issuance is expected to take place in 2023-2024, after being approved by the General Meeting of Shareholders and the State Securities Commission.
The issue that caused quite a heated debate from shareholders was that the market price of PDR shares on the Ho Chi Minh City Stock Exchange at the time of the meeting was over VND16,000 per share, the book value was also over VND12,000 but the issue price was VND10,000 per share. Shareholders said that the price was too low, risking diluting the value of the shares, causing disadvantages for existing investors.
Mr. Nguyen Van Dat, Chairman of the Board of Directors of PDR, was constantly reminded by shareholders "not to sell too cheaply" along with many warnings "be careful of being sued for violating the law when shareholders feel damaged", some investors even suggested "the company should issue shares at the right market price on the stock exchange, if no one buys, I will buy".
In the heat of the questioning session, Mr. Dat called on investors to remain calm and believe that the company always respects the law, and that the issuance of shares completely complies with the will of the shareholders' meeting. He admitted that in the short term, shareholders will suffer losses when issuing shares with a par value of VND 10,000. However, he said that he himself is the largest shareholder and will also suffer the most losses during the difficult period at the end of 2022 (pressure to repay bonds).
"I am the one who sacrificed the most assets and suffered the most damage. I agreed to sell an asset worth 3,000 billion VND for 2,000 billion VND. I also sold or mortgaged family assets and personal assets to have money to help the company overcome difficulties," Mr. Dat confided.
Mr. Nguyen Van Dat, Chairman of the Board of Directors of Phat Dat Real Estate Joint Stock Company at the 2023 annual shareholders' meeting on June 30. Photo: Phat Dat Company
Mr. Dat hopes that shareholders will look further, this share issuance will help the company have more capital to pay short-term debts and have the financial resources to invest in potential projects, complete legal procedures and open for sale in 2023-2024. Once the challenges are overcome, in the long term the company will develop stably, shareholders will benefit.
The head of PDR shared that, as the largest shareholder, when the company faced difficulties, he personally contacted many shareholders and sought many investors to discuss raising capital, even if he had to sell personal assets to protect the company. At that time, banks did not lend for real estate, PDR's stock price was low, not many shareholders wanted to buy, and finding partners was not easy.
According to Mr. Dat, at this time, shareholders sitting here said that issuing shares at 10,000 VND was a cheap sale, but at the difficult time last year, it was uncertain whether anyone would buy at this price. When investors committed to investing, the share price increased, and at this time not selling as committed was a breach of trust. "During the development process, Phat Dat, thanks to its reputation, has overcome many storms and stood firm until today, so at this time it is also necessary to keep its trust," Mr. Dat explained.
When asked about the real value of PDR shares and when the company will be out of trouble, Mr. Dat said that the company had been extremely difficult during the 2022 crisis like many other real estate businesses. However, the company has overcome it and is taking steady steps. He explained that the real value of the shares depends on many external factors. What the company can control is to focus on its core values. This year and next year, the company will complete the legal procedures for many projects, conduct sales, and pay off all short-term debt (bonds). The company's health will certainly improve gradually.
The congress approved the issuance of shares to raise more than VND2,000 billion to pay off short-term debts and prepare capital to develop a series of potential projects. These projects include urban areas in subdivisions 2 and 9 of Nhon Hoi Eco-tourism Area, Binh Dinh (VND132 billion); Bac Ha Thanh Residential Area combined with urban renovation (over VND511 billion); Ngo May High-class Hotel Service and Trade Center, Binh Dinh (VND400 billion); Thuan An 1 and Thuan An 2 High-rise Complex Residential Area (VND300 billion).
In 2023, the company will conduct both wholesale and retail sales of real estate projects in parallel to generate cash flow as quickly as possible. This is a flexible change compared to the previous period when the company only sold wholesale to partners. According to the plan, this year the company will launch more than 13,000 products in markets with high demand such as Binh Duong, Ba Ria - Vung Tau, Binh Dinh and Da Nang.
The company targets total revenue this year of VND 2,800 billion, after-tax profit of VND 680 billion, down 48% and 41% compared to the results in 2022, and plans to pay 2023 dividends to shareholders in shares at a minimum rate of 15%.
The company announced at the meeting that its second quarter profit reached more than 360 billion VND. By the end of April, partner Danh Khoi had paid PDR 870 billion VND, and it is expected that from now until the end of the year, it will pay the remaining 1,000 billion VND.
Vu Le
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