CII begins to restructure capital sources, Q3 revenue drops 65%

CII General Director sells less shares than registered

Last October, shareholders of Ho Chi Minh City Infrastructure Investment JSC (Code CII) were stirred up when General Director Le Quoc Binh and his wife registered to sell all CII shares they held to switch to investing in convertible bonds.

However, recently, CII announced that Mr. Le Quoc Binh sold fewer shares than the registered amount. Specifically, Mr. Binh registered to sell 6,047,747 shares. However, the amount of shares Mr. Binh sold was only 6,040,747 shares, 7,000 shares less than the registered amount.

CII has just started restructuring its capital sources, Q3 revenue dropped 65.5% (Photo TL)

CII explained that the reason was a drafting error. Mr. Binh's share sale transaction took place from October 10, 2023 to October 23, 2023. Mr. Binh's ownership ratio decreased from 2.13% to 0% of charter capital after the above transaction.

Ms. Pham Thuy Hang, Mr. Binh's wife, also sold all 4 million CII shares she held, reducing her ownership ratio from 1.41% to 0% during the same transaction period. The purpose of the divestment was to buy convertible bonds that CII was about to issue.

CEO and wife divest capital, CII stock price drops sharply

At the 2023 Extraordinary General Meeting of Shareholders, Mr. Le Quoc Binh once reassured shareholders that the divestment to buy convertible bonds would not change the position of the couple with the company. However, it cannot be denied that during the period when Mr. Binh and his wife divested, CII's stock price had unfavorable developments.

During the transaction of selling more than 10 million shares of General Director Binh and his wife from October 10 to October 23, CII shares continuously decreased in price from VND 18,400/share to only VND 15,600/share. In the trading session on November 14, 2023, CII code was traded at VND 17,200/share, still not recovering to the level before the General Director's divestment transaction.

After fully divesting, Mr. Binh and his wife registered to buy back convertible bonds coded CII42301. In which, Ms. Hang registered to buy 6 million convertible bond purchase rights, Mr. Binh registered to buy 10 million convertible bond purchase rights.

Convertible bonds coded CII42301 were issued by CII with a face value of VND100,000/bond. Thus, it is estimated that Mr. Binh and his wife will have to spend VND162 billion to buy the bonds.

Restructuring capital sources, Q3 revenue decreased by 65.5%

The issuance of convertible bonds is part of CII's capital restructuring plan to reduce its debt ratio. As announced at the extraordinary shareholders' meeting, CII plans to issue an additional VND7,000 billion in convertible bonds to balance its financial leverage.

CII's plan to restructure capital sources using convertible bonds (source: Documents of CII's 2023 Extraordinary General Meeting of Shareholders)

Regarding the business situation in the third quarter, CII achieved revenue of 761.2 billion VND, down 65.5% compared to the same period. Cost of goods sold accounted for 466.3 billion VND, gross profit was only 265.7 billion VND, down 19.2% compared to the same period.

Financial revenue in the period increased by 83.5% to VND270.6 billion. On the contrary, financial expenses also increased by 15.1% to VND371.8 billion. Of which, interest expenses alone accounted for VND267.9 billion. Business management expenses and sales expenses accounted for VND12.9 billion and VND68.1 billion, respectively. Profit after tax in the third quarter reached VND107.3 billion, up 9.7% over the same period.

Regarding capital structure, CII's total capital at the end of Q3 reached VND26,080.6 billion, down from the beginning of the year. Total liabilities decreased from VND20,258.5 billion to VND10,022.6 billion. Long-term debt decreased from VND9,415.9 billion to VND7,791.1 billion. Owner's equity was recorded at VND8,058 with accumulated undistributed profit after tax at VND2,441.5 billion.

Source: https://www.congluan.vn/cii-tai-co-cau-nguon-von-doanh-thu-quy-3-sut-giam-65-post272327.html