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Banking & Finance

APEC and Golden Lotus merge

Released at: 11:05, 17/11/2014

APEC and Golden Lotus merge

The newly-formed company is expected to be a powerful new force in the securities field.

by Son Ho

On November 8 APEC (stock code APS) organized a second EGM (extraordinary general meeting) because there were insufficient shareholders in attendance at the first.

The meeting received a 100 per cent vote in support of its merger with Golden Lotus Securities (GLS) at a 1:1 share ratio. The new company's name will remain APEC, with charter capital of $24.44 million, more than 1.5 times of APEC's charter capital and three times GLS's capital. APEC will issue 13.5 million shares in exchange for the existing shares of GLS. This will mark the third successful merger and acquisition (M&A) between securities firms in Vietnam.

Views differ, however, on APEC accepting the 1:1 exchange ratio, because it is currently performing better than GLS and has higher charter capital. APEC's equity currently stands at $16.31 million (initial capital was $18.83 million) while GLS's equity is $3.01 million (initial capital was $6.44 million).

"At first, we thought about a more beneficial exchange ratio for APEC shareholders, such as 1:1.2 or 1:1.3," said Mr. Nguyen Do Lang, Chairman of APEC. "But, in the end, after much thought, finally we determined that the 1:1 ratio is reasonable, based on the balance of interest between the two sides." He also pointed out GLS has certain unique advantages. For example, its shareholders, such as Dong Tam Tiles, Thu Duc Housing, and Mekong Delta Housing, are big businesses and will support the business strategy of the new company post-merger. With the GLS deal expanding APEC's size and influence, it isn't hiding its ambition of becoming the leading securities company in Vietnam.

APEC has been active in preparing for the next stage post-merger, the most recent action being fund raising activities of $7.05 million for Licogi 16 in October.

According to a representative from APEC, from this deal it could collect fees of between $235,000 to $376,000, and obtain better conditions to improve its position in the investment banking sector. APEC has also agreed on a new head office for the company, which is yet to be disclosed.

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