VNECO has sold nearly 29% of its stake in VNECO 3.

The decision to divest a portion of the capital in VNECO3 was made just before the planned share offering to existing shareholders at a 1:1 ratio.

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Vietnam Electricity Construction Joint Stock Corporation (VNE – HoSE) has just announced the completion of the sale of 382,766 VE3 shares of VNECO 3 Electricity Construction Joint Stock Company (VE3 – HNX), equivalent to nearly 29% of VNECO 3's capital, to restructure its investment portfolio.

Recent trading data shows that a block trade occurred with the volume of shares transferred exactly matching the volume of shares sold by VNECO. Accordingly, 382,766 VE3 shares were traded by VNECO on September 24th, with a value of 3.83 billion VND, averaging approximately 10,000 VND per share. This is 8.7% higher than the closing price of the same day (9,200 VND/share) and significantly higher than the closing price of the previous weekend (7,500 VND/share).

With the shares sold at par value, VNECO broke even after reducing its ownership in this company. VNECO was formerly the parent company holding a controlling stake in VNECO3. However, the company reduced its ownership in Q4/2023. With the recent transaction, VNECO's ownership stake decreased from 49% to 20%. VNECO3 continues to be an affiliated company of VNECO. Despite continuously selling shares, VNECO remains the largest shareholder of this company.

List of companies in which VNECO owns less than 50% of the shares.

Conversely, VNECO3 gained a new major shareholder, Mr. Hoang Cao Son. This investor purchased 66,766 shares, equivalent to nearly 18% of the shares sold by VNECO. After the transaction, from a small shareholder owning 1.96% of the capital, Mr. Son is now the second largest shareholder with an ownership stake of 7.02%, second only to VNECO.

Currently, Mr. Dao Ngoc Quynh – Chairman of the Board of Directors of VNECO 3 – is also the representative of the capital contribution of Vietnam Electricity Construction Corporation.

The decision to divest a portion of its stake in VNECO3 was made just before the planned share offering to existing shareholders. Prior to this, VNECO3 announced a Board of Directors resolution on implementing a plan to offer additional shares to existing shareholders. Accordingly, the company plans to offer nearly 1.32 million shares at a ratio of 1:1 (shareholders owning 1 old share are entitled to purchase 1 new share). The issue price will be at par value of VND 10,000 per share. The capital raised from the share offering is expected to be allocated to supplement working capital to restructure short-term bank loans.

VNECO 3 operates in the field of construction of industrial projects, irrigation works, power plants, power lines and substations. The company mainly operates in the central and northern regions such as Nghe An, Ha Tinh , Phu Tho, etc.

Regarding business performance, in the first half of 2024, VNECO 3 recorded over VND 54 billion in net revenue, a 77.5% increase compared to the same period last year. However, the revenue increase was mainly in the trading segment, which has a thin gross profit margin and even operated below cost in the first half of this year. VE3's core construction business only saw a slight increase compared to the same period. Gross profit for the first six months was only nearly VND 3.1 billion, a decrease of almost 3% compared to the same period. Financial expenses increased by 15%, but administrative expenses decreased sharply by 30%, resulting in a net profit after tax of over VND 78 million, compared to a loss of VND 395 million in the same period last year.

As of June 30, 2024, VNECO 3's total assets amounted to VND 107.6 billion, a decrease of 13.6% compared to the beginning of the year. Short-term assets decreased from VND 116 billion to VND 99 billion. Short-term accounts receivable from customers decreased by 24% to nearly VND 34 billion. Short-term liabilities decreased by 16% to VND 88.5 billion, with short-term accounts payable to suppliers decreasing by as much as 43% to nearly VND 30.5 billion. The company still has VND 3.35 billion in undistributed profits.