Enterprises have asked shareholders to lend money,
their dividends, because they cannot arrange capital for production and
business from either bank loans or share issuances.


According to the State Securities Commission, 30
companies had registered to issue shares to increase capital this year,
but 10 of them have cancelled their plans.


Sacombank has sought the permission of shareholders to
cancel its plan to call for VND1tril worth of capital more from
shareholders, its staffs and foreign investors.


The plans by PAN, S12 and BBC to issue new shares have also been cancelled as stock prices have been falling down sharply.


The plan on profit distribution and share issuance by
Licogi 12 Company was only supported by 70% of votes during the
shareholders’ meeting in May, which was not enough for the plan to be
implemented.


The State Bank of Vietnam is keeping strict control
over the increases of chartered capital by commercial banks. Banks have
to show plans to use the capital to be mobilised and guarantee the
effectiveness of the plans. The Ministry of Construction has also
released a document in which it says it will more strictly control the
securities issuances of enterprises under it.


As lacking capital, enterprises now think of borrowing money from their shareholders.


In April, Dinh Vu Steel Company in Hai Phong city
persuaded shareholders to lend 45% of total dividends in 2007 to the
company at the interest rate of 1% per month. After that, the company’s
plan to issue shares (ratio 1:1) was not approved by the State
Securities Commission. And the company, once again, is calling for
support from shareholders. Those who want to get back the lent money
will receive the money back, while those who agree to keep lending will
get the interest rate of 1.5% per month. The principal and interest
will be paid on December 31, 2008.


Though considering this a creative solution, Ha Huy
Thang, Deputy General Director of Petrolimex, said that the dividends
will not be enough to feed investment projects. Dividends just account
for 10-20% of companies’ profit, and enterprises still have to rely on
bank loans to expand production.


However, the ‘initiative’ by companies to borrow money
from shareholders has been applauded by experts. The experts say that
this helps companies arrange capital for production and business while
not causing share dilution in the market.