Many organizations and individuals are actively seeking out struggling securities companies for mergers and acquisitions (M&A), while also renaming and replacing leadership, with the goal of expanding their ecosystem.
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Change ownership when business is struggling.
The fact that the State Securities Commission (SSC) has stopped issuing licenses for new securities companies over the past five years has made existing securities companies, even those with poor performance, attractive targets for M&A groups/individuals seeking to enter the market.
In 2024, the market continued to witness a series of small and medium-sized securities companies changing ownership and rebranding with the arrival of new shareholder groups. For example, Hoang Gia International Securities Joint Stock Company changed its name to UP Securities Joint Stock Company, simultaneously adopting a new brand identity and transitioning to an online trading platform.
In fact, prior to the name and brand change, the company had experienced significant shareholder changes, with the dismissal of several members of the Board of Directors, including Mr. Le Thanh (Chairman of the Board), Mr. Ho Ngoc Toan, Ms. Tran Thi Thu Huong, and Mr. Le Thanh Ha. Conversely, Mr. Cao Tan Thanh was appointed Chairman of the Board; and Mr. Vu Viet Bao, Mr. Le Tuan, and Ms. Vu Thi Hong Giang were appointed as members of the Board.
It is known that, prior to the restructuring by the new group of shareholders, as of June 30, 2024, UP Securities had a charter capital of VND 300 billion and total assets of VND 324.9 billion, placing it in the group with low charter capital.
The 16th Vietnam M&A Forum 2024 – a prestigious annual event on mergers and acquisitions and investment networking organized by Investment Newspaper under the direction and sponsorship of the Ministry of Planning and Investment – will be held at the JW Marriott Saigon Hotel (Ho Chi Minh City) on Wednesday, November 27, 2024.
With the theme "A Blossoming Market," the Vietnam M&A Forum 2024 will delve into emerging M&A opportunities in promising sectors such as real estate, retail, technology, renewable energy, financial services, and logistics.
The event will include the following main activities:
– The main conference will feature leading speakers from Vietnam and internationally.
– Honoring outstanding M&A deals and consultants during the 2023-2024 period.
– Publication of the 2024 M&A Market Overview Special Issue (Vietnamese – English bilingual).
Similarly, recently, Saigonbank Berjaya Securities Joint Stock Company also experienced fluctuations when the founding shareholders of Inter-Pacific Securities divested their shares. Ms. Nguyen Thi Huong Giang, Chairwoman of the Board of Directors, purchased an additional 4 million shares.
The structure of the Board of Directors also changed when Saigonbank Berjaya dismissed Mr. Pham Hoai Nam and Mr. Kuok Wee Kiat and elected Mr. Cao Minh Vinh and Ms. Nguyen Thu Phuong as replacements. This change in shareholders coincided with the period when the company increased its charter capital from VND 300 billion to VND 350 billion.
Saigonbank Berjaya is an underperforming unit; as of September 30, 2024, the company had accumulated losses of VND 260.87 billion, equivalent to 74.5% of its total charter capital.
A similar transaction took place at Hai Phong Securities Joint Stock Company (Haseco, ticker HAC), where two new shareholders, Mr. Tran Anh Duc and Mr. Vu Hoang Viet, invested hundreds of billions of VND, holding 19.94% and 24.87% of the charter capital respectively. Before the new group of shareholders joined, as of September 30, 2024, Haseco had accumulated losses of 32.3 billion VND, equivalent to 11.07% of its charter capital.
Regarding Viet Tin Securities Joint Stock Company (VTSS), after TIN Global Pte. Ltd acquired 49% of its charter capital, the company also changed its name to VTG Securities Joint Stock Company and moved its headquarters from Hanoi to Ho Chi Minh City.
Prior to the new group of shareholders, as of September 30, 2024, VTG Securities had a charter capital of VND 138 billion, total assets of VND 112.9 billion, and accumulated losses of VND 25.3 billion, equivalent to 18.3% of its charter capital.
Thus, it can be seen that the common point among the securities companies that have recently undergone personnel changes and restructuring is that they all have small charter capital and are operating at a loss.
Elevate operations
In the past, there have been many small securities companies that changed ownership, with the major shareholders then contributing additional capital, helping these companies to grow.
For example, at DSC Securities Joint Stock Company (code DSC), in 2020, Vietnam Equity Joint Stock Company reduced its ownership from 60% to 0% of the charter capital. Conversely, DSC Securities acquired other individual shareholders, including Mr. Ta Van Manh (owning nearly 1.5 million shares, equivalent to 25% of the charter capital) and Mr. Nguyen Duc Anh (owning 25% of the charter capital).
After several periods of fluctuation, by the end of 2023, DSC Securities had only two major shareholders: Mr. Nguyen Duc Anh (owning 35.6% of the charter capital) and NTP Investment Joint Stock Company (owning 34.2% of the charter capital). The remaining 30.2% of the charter capital belonged to minority shareholders.
Following the entry of new shareholders into DSC Securities, the company relocated its headquarters from Da Nang to Hanoi. Thanh Cong Group (TC Group) stated that DSC Securities joined the Group's ecosystem at the end of 2021.
With the backing of new shareholders, DSC Securities increased its capital from VND 60 billion to VND 1,000 billion, further increasing it to VND 2,048 billion in 2023, and received an additional loan from the Vietnam Prosperity and Development Bank (a member of TC Group).
Mr. Lam Van Van, representative of ECI Capital Investment Fund, commented that the push by organizations/individuals to acquire small, underperforming securities companies may stem from several motives. Acquiring smaller companies is easier when existing shareholders no longer wish to develop the company. Conversely, the buyer can officially own the securities company in a context where new establishment is not permitted and can support the existing ecosystem in raising capital in the future.
Source: https://baodautu.vn/cong-ty-chung-khoan-nho-va-vua-muc-tieu-hap-dan-trong-ma-d230209.html
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