PVMachino made a state divestment
22/07/2023PVMachino’s chairman – Mr. Pham Van Hiep revealed the “new move” of the company after divestment. What is that move, let’s find out with us!
What does state divestment mean?
Currently, in the Enterprise Law 2020 and other legal documents, there are still no specific regulations on the concept of divestment. However, we can understand in the usual way as follows:
The concept of divestment:
Divestment is understood as when an asset or some part of a subsidiary does not perform as expected, this is the opposite term of investment.
In essence, divestment is an activity for the main purpose of reducing some financial items or assets to serve other purposes of the enterprise.
In investment, the term divestment is one of the most common forms of expression for subjects and investors who want to withdraw capital from the company.
For example, a My Lan company sells assets of a subsidiary or withdraws investments in the company. This is called divestment
The concept of state divestment:
State divestment is a form in which the state withdraws investment capital from many enterprises through the following methods: capital recovery by selling shares, equitization, etc.
On the other hand, in another way, divestment of state capital is the work of the government or organizations in the state apparatus to sell or liquidate or withdraw investment capital from a subsidiary.
The capital collected after the state divestment will be used to supplement the state budget, reinvest, and focus on high-income industries.
PVMachino holds many valuable assets
After PetroVietnam Power Corporation (PV Power) announced that it would officially divest all capital at PVMachino – Petroleum Machinery and Equipment Joint Stock Company, the company’s stock price skyrocketed.
However, there is one thing that makes the public wonder why selling a valuable asset that is a controlling share in PVMachino but PVPower’s side has not announced the sale time, method of divestment, and what is the starting price?
Huge profit from divestment deal
The divestment deal in PVMachino has attracted the attention of many investors because the company holds many valuable assets with potential advantages such as: owning a large capital contribution of 98 billion VND in 3 joint ventures, which considered as a “golden egg” specializing in the production of machinery, automobiles, etc.
Among the three PVMachino joint venture companies operating extremely effectively, every year, they earn huge dividends: In 2016 the company received 100 billion dong in dividends and profit from trading, in 2017 it earned 84 billion dong, In 2018 it earned 80 billion VND, From 2019 to now, each year has earned an average of over 82 billion VND.
Besides, PVMachino is still the owner and manager of many valuable real estates in prime locations such as: 8 Trang Thi – Hoan Kiem (HN) with the land lot of 1,827.69m2, Dao Cam Moc street (Dong Anh,HN) with the land lot of 23600 m2; along with an indefinite surplus of land at No. 5, cluster 4, Khuong Dinh ward (Thanh Xuan, Hanoi).
Owning a subsidiary with the highest volume of business
Moreover, Da Nang Petroleum Machinery and Equipment Joint Stock Company (Daesco) is a subsidiary of PVMachino and also a huge agent of Mitsubishi Motors in Vietnam.
In 2019, Daesco achieved peak revenue in the vehicle business with VND 806 billion, equivalent to 1,356 cars sold.
Currently, Daesco is still managing a number of land plots located in Da Nang city: 53 Tran Phu with an area of 218.8m2; 51 Phan Dang Luu with 1,806.8 m2; 495 Nguyen Luong Bang with 3,241.6 m2; 10 Nguyen Phuc with 15,356 m2…
On the other hand, Daesco has also been leased land by the State with a term of 50 years to invest in the construction of Mitsubishi Daesco Hue – Southeast Thuy An new urban area (Thua Thien Hue).
What does PVMachino do to avoid loss of state capital?
After state divestment PVMachino has always developed its strengths in many fields and industries, at the same time aiming to invest in large projects.
Thereby, PVMachino will closely monitor capital divestments at its company to avoid any loss of state capital.
The stocks at PVM are forecasted to increase strongly. If investors are deciding to invest in the company, this is a smart and suitable choice.
Since the state divestment, the company has promoted improving governance, streamlining the apparatus, and reducing administrative costs.
At the Shareholders’ Council, Mr. Ho Cong Ky said that POW will conduct divestment at PVMachino in an open and transparent manner. At the same time, research and organize a roadshow to introduce PVMachino investment opportunities so that interested investors can easily access investment opportunities, thereby helping the company avoid capital loss.
PVMachino has a huge advantage when owning venture capital assets and real estate in the ecosystem that can amount to several trillion dong. This is also a great potential for investors who own a controlling stake in the company.
