TTC Land raises capital for Western-style management after name change

TTC Land raises capital for Western-style management after name change

Charmington.org | TTC Land, previously known as Sacomreal JSC, will raise capital from existing shareholders and adopt a Western-style management structure to lure in foreign investors.

New identity

At its annual general shareholders’ meeting, TTC Land has outlined its plan for 2018, following the name change from Sacomreal JSC last month. The re-named real estate firm will issue 212 million new shares to current shareholders, aiming to raise its charter capital to VND5.5 trillion ($241 million). The additional capital will be used for mergers and acquisitions activities.

Each new share will be offered at VND10,000 ($0.44) and each batch of 100 current shares entitles the investor to purchase 67 newly issued shares. Investors are free to trade these shares after purchase. The issuance is expected to take place in late 2018 or early 2019 and will be subject to approval from the State Securities Commission.

Shareholders questioned the feasibility of this share sale as the market price of TTC Land’s stocks have been on the downslope, hovering at only VND11,000 ($0.48) per share, and TTC Land is also organizing a parallel share sale to existing shareholders.

Chairman Pham Dien Trung expressed his optimism in TTC Land, stating that lots of foreigners are waiting to invest in the fast-growing firm.

“We believe that we will raise at least VND1 trillion ($43.8 million) from this sale. Even if we cannot collect any money from investors, we can still resort to bank loans. I am sure that the banks are willing to lend us money as we have a wide range of assets under management,” said Trung.

 

The chairman added that TTC Land’s stock price is likely to shoot up once positive news about the firm’s business plans spread.

It is noteworthy that TTC Land plans to follow in the footsteps of Vinamilk and other conglomerates in Vietnam by modernising its corporate governance. In particular, the firm will abolish the inspectorate team and set up an internal auditing committee, as well as do research on international accounting standards. According to Trung, this Western-style structure will improve TTC Land’s transparency and its appeal for foreign investors.

M&A plans

TTC Land will use the new capital to boost its stake at various industrial zones, shopping malls, and hospitality real estate. Previously, as Sacomreal JSC, the firm used to focus on the Ho Chi Minh City real estate market, but now it will expand to other areas such as Phu Quoc Island, Danang, Dong Nai, and Haiphong. The total area under management will be 1,500 hectares.

Specifically, TTC Land will buy 79 per cent of Toan Hai Van JSC, the developer of the mega-project Vinh Dam Complex in the south of Phu Quoc Island. Half of the complex, or 110 hectares, will be used for sea ports and warehousing, while the remaining half will be developed into a resort area named Ocean Lotus Island.

Another target company is Dang Huynh Industrial Zone Management JSC, in which TTC Land looks to boost its ownership to 51 per cent. Dang Huynh JSC is the operator of Tan Kim Industrial Zone in Long An province, spanning an area of 50 hectares, as well as warehousing facilities in Ho Chi Minh City, Binh Duong, and Dong Nai.

The last investee–Thanh Thanh Cong Industrial Zone JSC–currently operates the 1,020-hectare Thanh Thanh Cong Industrial Zone in Tay Ninh province.

In 2018, TTC Land plans to reach VND2 trillion ($87.7 million) of consolidated revenue, up 4 per cent year-on-year, and after-tax profit of VND248 billion ($10.8 million), up 24 per cent. The dividend payout ratio will be higher than 7 per cent.

TTC Land jumps into industrial zone segment

Accordingly, along with the housing segment, TTC Land will expand its operations into resort, commercial-rental, and industrial zone (IZ) real estate.

Notably, TTC Land will accelerate the construction of two commercial-rental real estate projects, namely TTC Plaza Binh Thanh in Ho Chi Minh City and TTC Plaza Duc Trong in Lam Dong province, in order to take them into operation soon. Besides, this year, the company will develop two more projects, namely TTC Plaza Danang and TTC Plaza Haiphong.

Besides, it will implement the construction of a 305-hectare resort complex in Phu Quoc.

Additionally, TTC Land will develop other IZ projects after the acquisition of the 1,002-hectare Thanh Thanh Cong IZ in Tay Ninh province and the 53-hectare Tan Kim IZ in 2017. Both of these IZ are located in the southern key economic zone and have an occupancy rate of 60 per cent.

Furthermore, TTC Land plans to develop projects across the country, instead of focusing on the south.

Once the restructuring ends, TTC Land will have total assets of VND17 trillion ($745.86 million) and own 2,000 hectares of land to develop real estate projects within the next ten years.

In 2010, the firm listed its shares on the Hanoi Stock Exchange. At the time, its charter capital reached VND1 trillion ($43.87 million). Thus, after more than eight years of operation, its charter capital increased to more than 90 per cent.

Site: charmington iris