Interfood preps IPO ingredients

18:13 | 15/05/2006
Malaysian-owned foodstuff and confectionery producer Interfood will sell more than 3.65 million shares early next month in a move to prepare for listing on Vietnam’s stock market.

Bourses nationwide are raising the bar, as international companies like Interfood offer flavoursome stocks

Fifteen per cent of its total 24.28 million shares will be sold to the public, strategic investors and its employees, a source from Saigon Securities Company (SSI), the consultant for the Dong Nai province-based company, said last week.
Of which, more than 1.7 million shares will be sold to the public via auction with the floor price of VND33,000 ($2) per share, 730,110 shares will go to its strategic investors via private placement at the average auction price while the remainder goes to its employees at a 20 per cent discount on the average auction price.
“The IPO plan is now under final stage of consideration by the State Securities Commission and we plan to launch the issuance in early June,” said Phan Hong Quan, a senior executive from SSI.
Local and foreign investors are entitled to register for the share auction, he added.
The issuance will help rationalise Interfood’s equity structure in order to obtain listing on the Ho Chi Minh City Securities Trading Centre in accordance with the existing law and regulations of the government.
If the issuance is successful, Interfood’s chartered capital is expected to increase to $15.3 million from the current $13m. Proceeds from issuing shares will be used to repay bank loans and increase the working capital related to its investment plan on PET bottle and carbonated juice drink lines that are financed by Vietcombank in Dong Nai province’s Long Thanh District.
Pang Tee Chiang, chairman and CEO of Interfood, said he was looking to mobilise more capital and list on the stock market. “We want to complete it as soon as possible so that we can trade shares on the stock exchange,” said Chiang.
In compliance with the existing regulation on the listing of shareholding foreign-invested enterprises (FIEs), shareholding FIEs will only be able to list shares they sell through an IPO, the total expected listing volume for Interfood is nearly 5.77 million shares, accounting for 23.7 per cent of the company’s chartered capital.
To increase the liquidity of the shares, Interfood has planned to dispose a total of 9.38 per cent of shares held by founding shareholders within one year after the completion of IPO, according to Chiang.
Interfood Shareholding Company (formerly known as Interfood Processing Industry Ltd), established in November 1991 by Trade Ocean Holdings Sdn. Bhd and three Malaysian individuals, was one of the first six FIEs approved by the Ministry of Planning and Investment (MPI) to convert into shareholding status.
Over the past 15 years of operations, Interfood has increased its total investment capital nearly 30 times from $1.14m to $30m and has built up a strong customer base for its products in the local and overseas markets. It now offers a wide range of more than 200 kinds of biscuits, bottle drinks and canned food.
According to the company prospectus provided by SSI, Interfood now holds a market share of 50-60 per cent in the non-carbonated juice drink segment in Vietnam and 2-3 per cent of the biscuit and confectionery segment.
Besides local markets, Interfood’s export revenue makes up 35 per cent of its total earnings, with North America and Southeast Asia as its main receivers.
Last year, the company recorded a net profit of more than $3.2m, a year-on-year increase of 20.47 per cent and paid a dividend of 23 per cent.

No. 761/May 15-21, 2006

By Nguyen Hong

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