Foreign-invested firms to list shares on market

Foreign invested enterprises (FIEs) who are convening to sharesholding companies now can get on the domestic securities bourse by a new instruction of the State Securities Commission (SSC).

The TAYA Co is a joint venture between Vietnam and Taiwan with a charter capital of VND182bil.

Foreign invested enterprises (FIEs) who are convening to sharesholding companies now can get on the domestic securities bourse by a new instruction of the State Securities Commission (SSC).

Under the instruction, shareholding companies will be allowed to list only their stakes sold outside the companies, not all of their share certificates.

Besides, foreign investors in each shareholding company now are permitted to hold 30% of the company’s total listing share certificates.

The instruction defining clearly these regulations as a legal framework will help shareholding companies put on the stock market, an official of the Bao Viet Securities Company (BVSC) said.

The BVSC now is helping the TAYA Wires and Cable Joint Stock Company to change into shareholding company, and then put TAYA’s stake on the domestic securities market.

The TAYA Co is a joint venture between Vietnam and Taiwan with a charter capital of VND182bil (US$11.5mil).

The company’s director Nguyen Quang Vinh said the SSC had permitted the TAYA to list its share certificates sold outside the company before issuing the instruction.

"In fact, TAYA’s founder shareholders are holding around 30% of capital, while foreign shareholders are owning 50%, but they (foreign holders) will not transfer their stake in the next few years," Mr Vinh said.

"The most important purpose while putting share certificates on the bourse is TAYA wants to promote its pretisge, try and see on the Vietnamese securities market, but not transferring the company’s capital ownership structure."

Up to now, TAYA has just sold 20% of its charter capital outside the company, meanwhile, BVSC is preparing document to ask for listing these share certificates.

Mr Vinh also said that TAYA was expected to receive the license for converting into shareholding company from the Ministry of Planning and Investment (MPI).

Last year, the company made profits of VND56bil ($3.5mil) after taxes.

During 2005-07 period, the company set a target of getting a turnover of VND650-830bil ($41-52.5mil) per annum, making profits of VND48-72bil ($3.1-4.5mil) annually; dividend is at 15% per year.

He also said that TAYA will complete all procedures for listing and submit to the SSC by the middle of September this year, adding that TAYA will become the first converting company to be listed on the Vietnamese bourse.

Another FIE, Austnam Company, who has received the converting license from the MPI, is interested in the SSC’s instruction.

An official of the company said the instruction promulgation is in time for FIEs, which will help them to be listed; citing that although the number of listing share certificates is restrained by stake sold outside the company (not being all of charter capital), the instruction is completely reasonable because all founder shareholders in FIEs want to sustain their right of management after converted into shareholding companies.

However, according to experts, the limited number of FIEs’ listing share certificates while high demand on buying FIEs’ stake will lead a ballooning situation of stake prices.

Therefore, in the long run, the SSC should loosen the restriction on the number of FIEs’ listing share certificates in order to increase equal right for all shareholders in each company.

When the Common Investment Law comes into effect by 2006, the putting of FIEs should be up to 70% of companies’ charter capital, jacking up attraction to both enterprises and investors as well, experts said.

(Source: Viet Nam News)