23:35 (GMT +7) - Tuesday 12/12/2017

Business

Masan completes buy back of over 100mn shares

Released at: 15:41, 17/11/2017

Masan completes buy back of over 100mn shares

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100.6 million treasury shares bought for $258.2 million.

by Ngoc Chi

The Masan Group Corporation has announced a buyback of 100.6 million shares at VND58,352 ($2.58) apiece, or VND5.87 trillion ($258.2 million), increasing its total to 109.8 million, or 9.5 per cent of the group’s charter capital.

Masan’s leaders expect the acquisition of the treasury shares will help increase future profitability for shareholders. 

Third quarter results reveal that Masan Consumer, the fast-moving consumer goods (FMCG) arm of the Masan Group, recorded recoveries in key industries such as beer, energy drinks, and meat products.

The company is now focusing on building a strong brand instead of investing in promotions. Inventory has been reduced to 2010 and 2011 levels and growth potential is expected to be in the double digits from the first quarter of 2018.

Group leaders believed that live pig prices will recover as consumer demand for pork picks up for the Tet holidays. They also believe it will start to realize results from growing its pig feed market share from 30 per cent to nearly 50 per cent (excluding captive markets) in 2018.

The performance of Techcombank and Masan Resources (which has seen a 50 per cent recovery in tungsten prices) will continue in the medium term and is not being properly reflected in Masan’s valuation.

The successful IPOs of consumer-centric businesses (Vietjet Air, VP Bank, and Vincom Retail) and the more recent investment in Vinamilk by Jardine Matheson show that investors today believe in Vietnam’s consumer growth story, particularly in sector leaders that can demonstrate market consolidation and a large consumer base. 

Masan Group in October announced it would postpone the issue of VND3 trillion ($132.2 million) non-convertible bonds, which was initially scheduled for this quarter.

The Group had planned to seek shareholders’ approval for its plan to issue up to 30 million bonds at a face value of VND100,000 ($4.42) apiece this month. The warrant-linked bonds are unsecured and non-convertible, with a maturity of 24 months and a fixed coupon of 10 per cent per annum.

The bond issue plan aimed to raise capital to scale up the company’s operations and restructure its debts.

However, in its latest filing to the Ho Chi Minh Stock Exchange, the Group said it is concentrating on the treasury buyback scheme, and due to market volatility has decided to cease the collection of shareholders’ opinions in writing in connection with this plan.

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