The Board of Directors of DIC Corp (DIG) assessed that the stock market was unfavorable, so they stopped the offering to ensure the interests of shareholders. This is not the first time DIC Corp planned and then suddenly canceled the capital increase plan.
The Board of Directors of DIC Corp (DIG) assessed that the stock market was unfavorable, so they stopped the offering to ensure the interests of shareholders. This is not the first time DIC Corp planned and then suddenly canceled the capital increase plan.
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| DIC Corp has not been able to increase capital in the past 2 years. |
On December 23, 2024, Construction Development Investment Joint Stock Corporation (DIC Corp, code DIG, HoSE floor) announced the Resolution of the Board of Directors on approving the suspension of the public offering of shares to existing shareholders to ensure the interests of shareholders in unfavorable securities conditions.
Specifically, DIC Corp has implemented the Resolution of the 2024 Annual General Meeting of Shareholders and the Board of Directors on the issuance of shares to the public to existing shareholders. In addition, DIC Corp has been granted a certificate of registration for public offering of shares No. 231/GCN-UBCK by the State Securities Commission dated December 12, 2024. Accordingly, the company will offer an additional 200 million shares to existing shareholders at a price of VND 15,000/share, thereby raising VND 3,000 billion.
However, the current stock market conditions are not favorable due to many unfavorable developments such as: The trading market is gloomy with low liquidity, strong and continuous net selling pressure from foreign investors since the beginning of 2024, exchange rate pressure, policies related to interest rates, etc.
“After reviewing the current market situation and adjusting capital arrangements through other forms of capital mobilization on the basis of ensuring the interests of shareholders and the company in the coming time, the Board of Directors decided to stop implementing the above-mentioned share offering. The implementation of the share offering will be carried out at another time when the stock market is favorable, ensuring the interests of shareholders and the group,” the document sent to DIC Corp shareholders emphasized.
In the Board of Directors' resolution dated November 26, 2024, adjusting the content related to the issuance of shares to the public, DIC Corp plans to use most of the mobilized capital to invest in projects. Of which, the estimated expenditure for the Cap Saint Jacques Complex (CSJ) phase 2 and 3 project is VND 1,135 billion; the Vi Thanh Commercial Residential Area project is VND 1,426 billion. The remaining VND 439 billion, the company plans to temporarily use to pay off bond obligations.
In case all shares are not offered for sale or only reach at least 70% of the offered shares, resulting in the proceeds not being enough to use for the above options, the Board of Directors will consider and use the following solutions separately, sequentially or simultaneously: Supplementing equity capital, borrowing from banks, finding investors to contribute capital to the project, issuing bonds...
This is not the first time DIC Corp has planned and then suddenly canceled a capital increase plan. Previously, in April 2023, DIC Corp also passed a resolution to stop implementing the plan to issue shares to existing shareholders according to the announcement of the State Securities Commission. At the 2022 Annual General Meeting of Shareholders held in April 2022, DIC Corp approved a plan to issue an additional 100 million shares at an offering price of VND 30,000/share. However, the second extraordinary General Meeting of Shareholders held in October 2022 approved a plan to adjust the offering price down to VND 15,000/share after the first extraordinary General Meeting of Shareholders failed due to insufficient shareholder participation.
No capital increase plan has been implemented since July 2022. DIG stock price is at its lowest level since April 2023. DIG stock is currently trading at VND19,400/share, down 27% compared to the end of last year and down 42% compared to the peak in April 2024.
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| DIG stock price has been continuously falling since April 2024. |
Regarding business performance, DIC Corp recorded net revenue in the third quarter of 2024 of VND 47 billion, down 80% year-on-year. The company reported a pre-tax loss of nearly VND 6 billion. However, deferred corporate income tax expenses of nearly VND 34 billion helped the company report a post-tax profit of VND 11.2 billion, down 7% year-on-year. In the first 9 months of 2024, the company achieved VND 869 billion in net revenue, up 46%, and pre-tax profit of VND 42 billion, down 70%. Thus, the company completed 38% of the revenue plan and 4% of the profit plan for the whole year.
Source: https://baodautu.vn/ke-hoach-chao-ban-co-phieu-cua-dic-corp-lai-ngung-giua-chung-d234486.html
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