Phuong Nam Cultural Joint Stock Corporation (PNC) will sell its remaining shares in CJ CGV Vietnam Co Ltd, the country’s largest multiplex cinema operator. PNC said in a recent resolution, which was approved by its shareholders, that the firm will offload its remaining 7.5 per cent stake in CGV Vietnam to receive an estimated VND101 billion (US$4.5 million).
The initial value of that 7.5 per cent stake was VND11.5 billion.
On June 28, PNC shareholders approved the sale of 12.5 per cent ​​of CGV Vietnam shares to Black Diamond Investment Joint Stock Company for VND160 billion and reduced the former’s holding to 7.5 per cent.
If successful, PNC will completely withdraw from CGV Vietnam, earning VND261 billion and valuing the cinema operator at VND1.3 trillion.
PNC will spend the amount of receivable paying debts to its partners and suppliers, adding to its working capital and making dividend payouts for 2018.
By the end of the second quarter of this year, PNC’s liabilities amounted to VND548.7 billion, 93 per cent of its total capital, of which the short-term loans borrowed from Cross Junction Investment was VND161 billion.
PNC has suffered accumulated losses of more than VND98.3 billion.
PNC is listing more than 11 million shares on the HCM Stock Exchange with ticket PNC.
The firm’s shares have been put on the restricted list since February 27 as it recorded losses in 2016 and 2017.
If the company continues running losses, the ticker could be delisted as accumulated losses exceed equity.
PNC ended Thursday at VND13,800 ($0.61) per share, unchanged from the previous session.
In 2011, the South Korean conglomerate CJ Group bought 92 per cent of Envoy Media, which owned 80 per cent of Megastar (the former name of CGV Vietnam) for $73.6 million.
Megastar at that time owned seven theatres with 54 screens and recorded $23 million worth of revenue in 2010. Megastar was renamed CGV in 2014.
In 2017, CGV reported VND2.8 trillion in revenue and VND140 billion in net profit, accounting for 47 per cent of the market share as the leading film distributor and movie theatre operator in Viet Nam.