Hoa Phat Group Company (HPG) has bought up nearly all outstanding shares in the Hoa Phat Energy Joint Stock Company, increasing its stake from 50 per cent to 99.86 per cent and turning the energy firm into the group's 11th subsidiary.
"The acquisition will help the group expand its operations, increase its strength in industrial production and ensure the stable operation of the Hoa Phat Integrated Steel Complex," the group announced on its official website.
Hoa Phat Energy Comapny, established in 2007, operates primarily in the production and trading of coke, an ancillary materials of the coal industry. In March 2008, it began construction of a coke and thermoelectric plant in the northern province of Haøi Duong with a budget of VND2 trillion (US$105.3 million). The first phase of construction on the plant was completed last October.
Following the transfer of the 30 million newly-acquired shares in the company to HPG, the group will contribute an additional VND200 billion ($10.5 million) in capital to Hoa Phat Energy, helping it raise its charter capital to VND800 billion ($42.1 million) and finance the second phase of the Hai Duong plant. The plant is expected to earn VND3.5 trillion ($184.2 million) annually upon its final completion in mid-2011.
Hoa Phat Group earned VND3.74 trillion ($196.8 million) and posted a net profit of VND462 billion ($24.3 million) in the first four months of this year, an increase of 66 per cent in total earnings and 14 per cent in profit compared to the same period a year ago.