Air-conditioners built by Refrigeration Electrical Engineering Corporation (REE). (Photo: reecorp.com) Hanoi (VNS/VNA) - The Refrigeration Electrical Engineering Corporation (REE) has accepted Platinum Victory Pte Ltd’s bid to buy 31.3 million REE shares.
The bid came on August 14 as the Singaporean firm offered to buy 31.3 million REE shares to raise its stake in REE by 10.11 percent to 35.01 percent.
Platinum Victory Pte Ltd planned to buy REE shares at 45,000 VND (1.93 USD) per share, 22.6 percent higher than REE shares at the end of the August 22 trading at 36,700 VND per share.
The transaction will be carried out within 30 days from the day the offer was made.
If the deal is pulled off, Platinum Victory will own 108.6 million shares of REE. The deal will cost the Singaporean business about 1.4 trillion VND (60.2 million USD).
The deal guarantees the foreign investor and other major shareholders will make further investment in human resources, physical and financial assistance, and corporate governance to help REE develop in a sustainable, stable way and meet the demands of all shareholders, REE’s board of directors said in a statement.
The publication of the bid proves the transparency of information disclosure is assured and all shareholders can learn the information of the deal when any individual or institutional investor wants to raise their stake above 25 percent of the firm’s capital, REE said.
Foreign ownership has reached the limit of 49 percent in REE’s capital. Therefore, Platinum Victory will have to buy shares from other foreign shareholders, REE added.
The bid was approved by three of the five members in REE’s board of directors. The two members that did not vote are “related to Platinum Victory Pte Ltd,” REE said.
In the second quarter, REE’s revenue was 1.26 trillion VND, up slightly from last year’s figure of 1.22 trillion VND.
The company's net profit fell 20 percent year on year to 458 billion VND in the second quarter as financial revenue dropped to 65 billion VND from last year’s 171 billion VND and borrowing interest rose sharply.
After six months, REE earned 2.34 trillion VND in combined revenue and 828.5 billion VND in combined profit. The figures were up 3 percent and down 16 percent year on year.
The company’s six-month earnings figures accounted for 42 percent and 56.5 percent of its full-year targets.
According to Viet Capital Securities Corp (VCSC), REE’s decline of first-half net profit came as strong office leasing earnings growth and recovery of the mechanical and engineering (M&E) segment failed to compensate for the power business’ earnings decline due to “lower rainfall and hydropower, no provision write-back for the Quang Ninh Thermal Power JSC (UPCoM: QTP) and weak results of the Pha Lai Thermal Power JSC (HoSE: PPC)”.
First-half revenue and net profit are in line with expectations as “hydropower earnings were weak in the peak season in the second half (of the year) versus the first half while the M&E and real estate segments have a nature of revenue and profit booking towards the year-end,” VCSC said in a report on REE’s six-month performance.
“We see minimal downside risk for (REE’s) 2019 earnings forecast (mainly due to PPC’s lower-than-expected Q2 2019 results)” but also “foresee upside risk to our projection for coming new investments,” VCSC added. - VNS/VNA
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