ex. Game, Music, Video, Photography

Coteccons begins new chapter, hopefully, after resolving feud with shareholders

Coteccons will replace two board members with nominees of two major shareholders with whom the management has had a running battle since 2017.

Ngày đăng: 17 tháng 3, 2021
Cập nhật: 2 tháng 8, 2021
Lượt xem: 90318552
Nguồn: vnexpress


On June 22 the construction giant announced the resignation of Nguyen Sy Cong and Tran Quyet Thang, and their places will be taken by representatives of Kustocem and The8th, two Singaporean investors with 18.23 percent and 10.42 percent stakes in the company.

The decision came at the company’s annual general meeting on Tuesday along with a formal apology from chairman Nguyen Ba Duong to shareholders, who admitted the board had been remiss in allowing conflicts of interest between the management and shareholders.

After Duong’s apology on Tuesday Coteccon’s CTD shares, listed on the Ho Chi Minh Stock Exchange and part of its VN30 basket of the largest capped stocks, surged twice to the ceiling, gaining 6.9 percent and 7 percent on two successive days.

The disagreements between the two major shareholders and the management began in mid-2017 when the company’s business was booming.

From being strategic partnerships, the relationship became confrontational after Kustocem twice called for extraordinary general meetings in October 2019 and early June to elect a new board of directors and order special audits of the management practices. It even wanted Duong to step down as chairman.

By June it had been able to rally support from a number of local and foreign shareholders owning around 45 percent of shares.

Coteccons had until then made a number of counter-arguments, including that the Singaporean investors were in reality involved in a hostile takeover bid.

But things changed when Vietnam’s leading construction firm announced the resignations on June 22. Kustocem representatives publicly thanked Duong for acting in the best interests of the company and shareholders, while he said geographical distance, cultural differences and the difference in views between the major shareholders and Coteccons’s board were the main causes of the recent "fuss."

"Resolving these bottlenecks is the start of a new chapter for Coteccons," he said.

The two new directors, who Coteccons said would be appointed soon, are Bolat Duisenov, CEO of Kusto Vietnam, and Herwig Guido H. Van Hove, general director of The8th.

Duong and Nguyen Quoc Hiep will be the only Vietnamese directors on the board, and Hiep is an independent board member.

While some minority shareholders raised concern saying most foreign personnel do not have much experience in or specific understanding of the Vietnamese construction market, the company dismissed the concerns saying it is more important that the board is able to find a common voice.

It said it would hire more experts for financial advice, transparency, and the management of transactions with its subsidiaries and sister companies.

Duong said in the last year or two the company had to turn down many large construction deals due to lack of consensus from the board.

Once it stabilizes internally it would find ways to use over VND3.3 trillion ($142.4 million) in cash and cash equivalents to diversify and tie up with prestigious investors, many of whom have a hard time accessing cash given the State Bank of Vietnam’s tightening of credit to the property sector in recent years, he said.

"If Coteccons only focuses on construction, it cannot achieve growth of 30-40 percent like in 2016-18 as there are more competitors in the industry, and work is limited."

The company has been the general contractor for most major projects in Ho Chi Minh City, Hai Phong and the northern Quang Ninh province, but still failed to meet last year’s revenue targets, he said.

"Coteccons will invest in real estate differently than other companies. We will not tender or buy up projects but will directly cooperate with developers to be safer."

The company also has the capacity to undertake infrastructure construction, but would wait for a better time because of the segment’s great risks, he said.

Cong, the general director who is set to step down, said one of the top priorities is for Coteccons to remain the number one contractor with a market share of around 5 percent.

Its audited report for 2019 shows the company’s post-tax profit slumped by 53 percent year-on-year to VND710 billion ($30.64 million) on 17 percent lower revenues of VND23.73 trillion ($1.02 billion).

According to the management, the steep fall in profits was because some projects were taking longer than expected to finish, inflating fixed costs, and pressure from competitors drove prices down, especially in the context of there being less work to go around this year.

Construction accounted for almost all of Coteccons’s revenues, with a modest amount coming from renting construction equipment and offices and sales of materials.

The company expects revenue and profits to fall 32.6 percent and 15.5 percent respectively this year as a result of the Covid-19 pandemic dampening the market.

Duong said it is reconsidering a merger with Ricons Construction and Investment JSC, an affiliate in which it holds a 14.87 percent stake.

The proposal had failed to get board approval last year, but if the new board approves, the matter would be placed before shareholders next year, he added.

Từ vựng liên quan


Tin tức liên quan

business 30/03/2021

Soaring 3G, 4G use to boost mobile ads, commerce

industries | 164391857

Widespread adoption of 3G and 4G networks in Vietnam presents a lucrative growth opportunity for mobile advertising and commerce.

news 14/06/2021

Quang Nam karaoke parlors to be fined after violating social distancing order

news | 218491845

Two karaoke parlors in the central province of Quang Nam are facing fines of VND15 million ($652) for violating Covid-19 social distancing regulations.

business 01/08/2021

Limit stay-at-work to localities with pandemic under control: gov’t committee

companies | 229731839

The government-run Private Sector Development Committee (Board IV) has proposed that the stay-at-work model is applied only in localities where the pandemic situation is under control.

life 24/03/2021

Vietnam cottage industry designs paths to resilience

trend | 85461857

Traditional craft villages are fighting to revitalize their business by developing new designs from traditional motifs and becoming part of the circular economy.

travel-life 24/03/2021

FKJ (DJ Set) w/ Quan & Dustin NGO 春風 at Savage

what-s-on | 89651881

FKJ will perform with a DJ set supported by local Vietnamese artists including Quan (Live), resident DJ at Savage. 

sports 30/03/2021

Man Utd shares waver in Frankfurt as Mourinho hire expected

sports | 156681854

Shares in English soccer giant Manchester United wavered in volatile trading on the Frankfurt Stock Exchange on Monday, following media reports that the club was set to replace its manager with former Chelsea boss Jose Mourinho.


Tin được xem nhiều nhất

news 22/03/2021

Vietnam among hardest hit by cryptomining attacks: security bulletin

news | 38152088

Vietnam is among nations hardest hit by cryptomining attacks this year, says Moscow-based multinational cybersecurity firm Kaspersky Lab.

business 17/03/2021

Vietnam lifts rice export ban

economy | 318592

Vietnam has lifted its ban on rice exports with immediate effect, allowing 400,000 tonnes to be shipped this month.

life 18/03/2021

Online ethnic minority comedies no laughing matter

trend | 95918577

Many Vietnamese YouTube channels have produced comedy videos portraying ethnic minority life through distorted facts and smutty jokes, causing community backlash.

news 17/03/2021

Hanoi relives historic, liberating moment

news | 80618559

An exhibition in Hanoi goes back 64 years, when the French troops officially withdrew from Vietnam.

business 17/03/2021

Coteccons begins new chapter, hopefully, after resolving feud with shareholders

companies | 90318552

Coteccons will replace two board members with nominees of two major shareholders with whom the management has had a running battle since 2017.

news 17/03/2021

A winsome foursome presents a ‘Happy Vietnam’

news | 1218544

Viet, Nam, Hanh and Phuc whose first names combine to mean "Happy Vietnam" are healthy quadruplets growing in the southern province of Dong Thap.


Link Tài Trợ - Sponsored Links

Công Thức Vật Lý