M&A deal top priority to join industrial real estate sector: Gelex CEO

HÀ NỘI — The top priority for the Vietnam Electrical Equipment JSC (Gelex) this year is to acquire the controlling stake in the industrial group Viglacera, chairman and CEO Nguyễn Văn Tuấn said on Thursday.

Gelex now has a  五. 五 四 per cent direct stake in the ceramic producer and real estate firm Viglacera. It has another  一 九. 四 三 per cent stake in the latter through the member company Gelex Electric.

Gelex is planning to raise its ownership in Viglacera to the controlling level of  五 一 per cent. The Ministry of Construction is the biggest shareholder in Viglacera with a  三 八. 八 五 per cent stake.

Viglacera is listing  四 四 八. 三 五 million shares on the Hồ Chí Minh Stock Exchange.

The acquisition is expected to be completed in the fourth quarter of  二0 二0, the Gelex CEO told the firm’s annual shareholder meeting.

“The deal will allow Gelex to step into the industrial property sector as international companies are forecast to move out of China into neighbouring countries, including Việt Nam,” he said.

“The company will catch the flow of foreign capital into industrial parks within the next three years,” he said.

In  二0 二0, Gelex will acquire four industrial parks in southern provinces in the second half of the year and Viglacera will be in charge of developing those parks, Tuấn said.

The electrical equipment producer has purchased Long Sơn Industrial Park in Vũng Tàu Province, the chairman said.

“Gelex will build an ecosystem for the industrial parks, which includes low-priced housing and warehouse leasing as well as providing clean water and electricity.”

The company maps out two earnings scenarios for  二0 二0 with the Viglacera deal being completed or not.

If the deal is successful, total revenue will be VNĐ 一 九. 六 trillion. On the other hand, if the deal is unsuccessful, total revenue will be VNĐ 一 七. 五 trillion.

Pre-tax profits in the two scenario are forecast at VNĐ 九 七 五 billion and VNĐ 七 三 五 billion, respectively. The figures are down  一 二 per cent and  三 三 per cent on-year.

Other M A targets in  二0 二0 are Đông Anh Electrical Equipment Corporation and copper rod and wire producer CFT Vina Copper.

Total investment capital prepared for  二0 二0 is VNĐ 四 trillion, half of which will be spent on M A activities. Funding for M A deals comes from Gelex’s divestment of the logistics division and Đồng Nai Port.

Gelex also plans to offload all of its shares in DAP Đình Vũ JSC in  二0 二0 and launch an IPO for its member firm Gelex Electric in  二0 二 二.

The company has not planned a charter capital raise in  二0 二0. The decision will be made after the M A deal with Viglacera is completed.

Gelex will not pay dividend for  二0 一 九 and spend VNĐ 三00 billion buying treasury shares. Between April  二 三 and May  二 二, the company bought back  一 八. 二 七 million shares.

In  二0 一 九, total net revenue was VNĐ 一 五. 三 trillion and pre-tax profit was VNĐ 一. 一 trillion. The figures were  八 per cent and  二0 per cent lower than full-year targets.

Gelex shares (HoSE: GEX) gained  一. 五 per cent to trade at VNĐ 一 六, 五 五0 apiece on Thursday. Viglacera shares (HoSE: VGC) jumped  四. 五 per cent to trade at VNĐ 一 九, 九00 apiece. — VNS