Steel producer Hoa Sen Group (HSG) has sold nearly 12 million shares at a price of VND45,000 (US$2.40) to three domestic and foreign financial institutions: South Korea's STIC Investment Inc, FPT Securities Comany and Bong Sen Fund Management Company.
The share sale has allowed the HCM City-listed Hoa Sen to raise capital of VND538 billion ($28 million) and made Hoa Sen the first Vietnamese enterprise in which STIC has invested following nearly two years of market research, according to Kevin Lim, general director of STIC, which made a $10 million investment in the group.
"STIC chose Hoa Sen Group for two reasons," said Kim. "First, it is the business leadership of the company's Chairman, Le Phuoc Vu. And second, the company's management system and employee competence attracted us."
Vu confirmed that the strategic co-operation marked a new stage in the development of Hoa Sen and would help it achieve a target of $1 billion in annual revenue and $100 million annual profit.
Capital raised from the sale of Hoa Sen shares would be used in building the Ton Hoa Sen Phu My Factory, which would produce up to a million tonnes of zinc-coated and cool-rolled steel per year once completed, Vu said.
The factory, which began construction in May of last year, was projected for completion in 2013 at a total cost of over VND2.3 trillion ($121 million). But products from the first phase would be on the market next month.
Hoa Sen has also recently signed financing agreements on the project worth VND450 billion ($23.7 million) with a consortium of banks including Vietcombank and Eximbank.
Hoa Sen Group, established in 2001, currently has charter capital of VND570 billion ($30 million). Last year, the group earned VND2.85 trillion ($149 million) and posted a net profit of VND189 billion ($10 million). This year, it has targeted a much higher VND5 trillion ($262 million) in revenue and VND520 billion ($27.2 million) in profit.