Pomina Steel shares surge after news of a comprehensive company restructuring.
Shares of Pomina Steel Joint Stock Company surged to their upper limit in the first trading session of the week, reaching 5,220 VND, shortly after the company announced a comprehensive restructuring plan.
Shares of Pomina Steel Joint Stock Company (stock code: POM) maintained their bullish momentum throughout the first trading session of the week, despite many other stocks in the same sector such as HSG and NKG moving in the opposite direction. POM closed at VND 5,220, up 7% from the reference price, marking its strongest gain since the beginning of the year. POM closed the session with no sellers, while there was a buy order surplus of over 647,000 shares.
The trading volume in the first session of the week reached over 4.03 million shares, a five-fold increase compared to the previous session, corresponding to a transaction value of over 20 billion VND. Of this, more than 1.25 million shares changed hands at the ceiling price. Not only domestic investors but also foreign investors actively accumulated POM shares, as evidenced by the net buying volume of over 580,000 shares.
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| Trading POM shares from October 2023 to the present. |
According to the company's management, the robust restructuring process, particularly with the participation of a strategic investor, marks a significant turning point for the company. This strategic partnership will provide the necessary capital for the company to restart its blast furnace for steelmaking. The company expects to restart the blast furnace in the last quarter of this year to anticipate the resumption of real estate projects.
Furthermore, at the upcoming meeting, the company will present to shareholders a plan to increase the investment capital for the blast furnace project at the Pomina 3 branch from VND 4,975.2 billion to VND 5,879.7 billion, an increase of VND 904.5 billion. The management did not state the reason for increasing the investment capital for this blast furnace project, only stating that the investment value of VND 5,879.7 billion is based on the audit results of AFC Vietnam Auditing Company Limited, signed on March 2, 2023, compared to the investment capital plan approved on October 31, 2020.
Prior to this announcement, the Board of Directors of Pomina Steel Joint Stock Company passed a resolution to temporarily suspend the private placement plan to strategic investor Nansei (Japan). The detailed reasons for this decision were not disclosed by the Pomina Steel Board of Directors.
The offering plan was approved at the annual general meeting of shareholders in mid-July 2023. Initially, the company planned to issue over 70.17 million shares to Nansei Steel at a price of VND 10,000 per share to raise nearly VND 702 billion. The purpose of the fundraising was to increase equity capital, supplement working capital, and prepare finances for the planned restart of the blast furnace in 2024. According to the plan, if the offering is successful, Pomina Steel's charter capital will increase to VND 3,498 billion. Strategic investor Nansei Steel will own 20% of the charter capital.
Recently, Pomina Steel also announced disappointing business results for 2023. Specifically, the company recorded net revenue for the year at VND 3,281 billion, a significant decrease compared to VND 12,936 billion in the previous year and far short of the VND 9,000 revenue target set by the company's management. The company reported a net loss after tax of VND 960 billion for the year, far exceeding the projected loss of VND 150 billion.
The company currently has liabilities of VND 8,809 billion, an increase of nearly VND 400 billion compared to the beginning of the year. The majority of this is short-term and long-term financial debt. Equity at the end of the year was VND 1,594 billion. Undistributed after-tax losses increased to VND 1,270 billion.
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