Managing cash flow from issuing shares to selling assets

In the last quarter of 2024, a series of real estate and manufacturing enterprises plan to re-implement plans to offer shares and issue bonds to raise capital.

As the market situation shows signs of warming up, a series of businesses are planning to deploy and take steps to issue shares to increase capital.

At Nam Kim Steel Corporation (code NKG), the Company returned to the investment plan of 4,500 billion VND to build a new factory with a capacity of 1.1 million tons/year, increasing the Company's total capacity from 1 million tons/year to 2.1 million tons/year.

Mr. Ho Minh Quang, Chairman of Nam Kim Steel, said that the new factory is expected to come into operation in the fourth quarter of 2025 or the first quarter of 2026. The company will increase capacity in stages and reach 100% capacity in 2027. From now until 2026, the capacity will be increased from 1 million tons/year to 1.6 million tons/year.

It is known that in the new investment project, Nam Kim Steel wishes to go deeper into the galvanized steel value chain. The company will increase product value, aiming at product lines that can serve the production of household appliances, machine parts, and precision mechanics, thereby expanding its customer base.

At the Construction Development Investment Corporation (DIC Corp, code DIG), this unit plans to offer 200 million shares to existing shareholders at VND15,000/share, raising VND3,000 billion. Of the mobilized amount, DIC Corp plans to use VND1,135 billion to invest in the Cap Saint Jacques Complex Project Phase II and III; VND965 billion to invest in the Vi Thanh project; the remaining VND900 billion will be used to pay off bonds.

Saigon Real Estate Corporation (Saigonres, code SGR) is seeking shareholders' approval to offer 20 million individual shares at VND40,000/share to Chairman Pham Thu, raising VND800 billion. Of which, the amount raised is expected to be used to invest VND500 billion in the Viet Xanh Ecological Urban Area Project, the remaining VND300 billion will be used to pay off loans.

The Viet Xanh Eco-Urban Area project is invested by Saigon Hoa Binh Real Estate Company Limited (a subsidiary of Saigonres), with a scale of 49.92 hectares in Tan Vinh commune, Luong Son district (Hoa Binh), with an initial investment capital of VND 833 billion.

Similarly, the Hanoi South Housing and Urban Development Investment Corporation plans to offer more than 8.83 million shares to existing shareholders, raising VND88.35 billion. The Company will use VND50 billion of the raised money to invest in the construction of projects invested by the Company; VND30 billion to pay off debts; and the remaining VND8.35 billion to supplement working capital.

Besides investment and expansion plans, many businesses plan to raise capital for the purpose of restructuring and paying off upcoming debts.

For example, Binh Duong Development and Trading Joint Stock Company (code TDC) has just approved a plan to privately offer 35 million shares to raise at least VND350 billion. Of which, the Company will use the raised money to buy back a portion of the bond lot coded TDC.BOND.700.2020 (with outstanding debt of VND700 billion) before maturity.

DNP Holding Corporation (code DNP) plans to issue two bonds with a total face value of VND200 billion, with a term of 4 years. The Company plans to use the raised money to pay off bank loans.

Not only for the purpose of debt restructuring and investing in new projects, but also due to cash flow difficulties, SMC Investment and Trading Joint Stock Company (code SMC) has to sell highly liquid assets. In particular, SMC plans to transfer 27,731.4 m2 of land in Da Nang with an expected price of more than 96 billion VND.

In fact, this is not the first time SMC has transferred assets. In November 2023, the Company approved the transfer of 6,197 m2 of land in Binh Duong for VND 49 billion; in January 2024, it continued to approve the transfer of 9,096 m2 in Ho Chi Minh City for VND 126 billion; in April 2024, the Company continued to transfer 329.5 m2 of office building in Ho Chi Minh City for VND 170 billion and divested a series of financial investments.

Sharing with Dau Tu Newspaper reporter, Mr. Lam Van Van, representative of ECI Capital Investment Fund said: "Although the real estate market is recovering, the signal is slow, the cash flow from new sales activities is still low, while the pressure of debt from bonds and banks is due. This makes businesses have to find ways to issue shares and bonds to supplement capital to repay bank debts, as well as find capital to serve investment needs when market conditions are more favorable."

Source: https://baodautu.vn/xoay-xo-dong-tien-tu-phat-hanh-co-phieu-toi-ban-tai-san-d226898.html