Pomina Steel shares surge after news of comprehensive company restructuring

Shares of Pomina Steel Joint Stock Company increased by the maximum limit in the first trading session of the week, to 5,220 VND, not long after the company announced a comprehensive restructuring plan.

Shares of Pomina Steel Corporation (stock code: POM) remained in an excited state throughout the first trading session of the week despite many stocks in the same industry such as HSG and NKG moving in the opposite direction. POM closed at VND5,220, up 7% compared to the reference price, marking the strongest increase since the beginning of the year. POM closed the session with no sellers, while there were more than 647,000 shares left to buy.

The matched volume in the first session of the week reached more than 4.03 million shares, up 5 times compared to the previous session, equivalent to a transaction value of over VND20 billion. Of these, more than 1.25 million shares were traded at the ceiling price. Not only domestic investors but also foreign investors actively collected POM shares, as shown by the net purchase volume of more than 580,000 shares.

POM stock trading from October 2023 to present.

According to the company's management, the strong restructuring process, especially with the participation of a strategic investor, is a milestone marking an important turning point for the company. This strategic cooperation will provide the necessary capital for the company to restart the steel billet blast furnace. The company plans to resume operations of the blast furnace in the last quarter of this year to anticipate the return of real estate projects.

In addition, at the upcoming meeting, the company will present to shareholders a plan to increase the investment capital of the blast furnace project at the Pomina 3 branch from VND 4,975.2 billion to VND 5,879.7 billion, an increase of VND 904.5 billion. The Board of Directors did not give a reason for increasing the investment capital of the blast furnace project at this branch, but only said that the investment value was up to VND 5,879.7 billion based on the audit results of AFC Vietnam Auditing Company Limited signed on March 2, 2023 compared to the investment capital plan approved on October 31, 2020.

Before announcing this information, the Board of Directors of Pomina Steel Joint Stock Company passed a resolution to temporarily suspend the implementation of the private offering plan to strategic investor Nansei (Japan). The detailed reason for this decision was not announced by the Board of Directors of Pomina Steel.

The offering plan was approved at the annual general meeting of shareholders in mid-July 2023. Initially, the company planned to issue more than 70.17 million shares to Nansei Steel at VND10,000 per share to raise nearly VND702 billion. The purpose of the mobilization is to increase equity, supplement working capital, and prepare finances to implement the plan to restart the blast furnace in 2024. According to the plan, if the offering is successful, Pomina Steel's charter capital will increase to VND3,498 billion. Strategic investor Nansei Steel owns 20% of the charter capital.

Recently, Pomina Steel also announced poor business results for 2023. Specifically, the company recorded net revenue for the whole year of VND 3,281 billion, a sharp decrease compared to VND 12,936 billion of the previous year and far below the revenue target of VND 9,000 set by the company's management. The company reported a loss after tax for the whole year of up to VND 960 billion, far exceeding the expected loss of VND 150 billion.

The company currently has VND8,809 billion in liabilities, an increase of nearly VND400 billion compared to the beginning of the year. Most of this is short-term and long-term financial debt. Owners' equity at the end of the year was VND1,594 billion. Undistributed loss after tax increased to VND1,270 billion.

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