2 million ESOP shares to be issued, together with 18 million in a private placement.
According to a resolution from the Board Management at the Cuong Thuan IDICO Investment and Development Joint Stock Company (HSX stock code CTI), the company has set a revenue target of VND1.396 trillion ($61.27 million) and after-tax profit of VND140.9 ($6.2 million) for 2017, with an expected cash dividend of 17 per cent. In the second quarter of the year the company will pay a cash dividend for 2016 of 16 per cent.
At the same time, to meet investment needs this year, the Board also agreed to submit a plan to issue shares to increase charter capital to the next annual general meeting of shareholders, which is to be divided into two parts: the issuance of ESOP shares to employees, and a private placement to strategic investors. The Board plans to issue 2 million ESOP shares at a price of VND15,000 ($0.66) per share at a rate of 4.65 per cent of outstanding shares, with sales limited for one year.
It also plans to offer 18 million shares to strategic investors at a price of VND22,000-25,000 ($0.97-1.1) per share at a rate of 41 per cent of outstanding shares. The offering is expected to be conducted in the first or second quarter, after approved by relevant State agencies. The total amount raised from the offering will be VND462 billion ($20.33 million).
According to the Board of Management, the capital mobilized will be used to invest in the build-transfer (BT) Ring Road around Tri An Lake in southern Dong Nai province, a social housing project in Tam Hoa in Dong Nai, and investment in machinery and equipment for the Tan Cang 8 mine and the Doi Chua 3 mine in Dong Nai, and the Xuan Hoa mine in northern Vinh Phuc province. The remainder will be used to restructure short-term debts and other debt. Strategic investors must meet financial capacity requirements and commit to contribute to the development of CTI.
Mr. Tran Nhu Hoang, Chairman of CTI, said that many funds have expressed an intention to participate in the offering, of which its existing major shareholder - VOF Investment Limited - expects to register to buy 2 million shares. In 2017, he added, revenue from construction and fee collections will increase sharply, with fee increases mainly coming from the build-operate-transfer (BOT) National Highway No.91 project, as the final stage has recently been completed and fees are now being collected. In its stone business, the company has invested in two more crushers and plans to double its capacity compared to 2016.