SCIC divests all capital from Cienco 8, is the secretive Phuc Loc Group interested?

According to the list of the State Capital Investment Corporation (SCIC), Civil Engineering Construction Corporation 8 (Cienco 8) is in the first phase of divestment in 2023. Currently, SCIC still holds 18% of Cienco 8's capital.

Cienco 8 has a charter capital of nearly 590 billion VND. The State holds nearly 108.7 billion VND. In 2017, the Ministry of Transport (MOT) transferred the right to represent capital at Cienco 8 to SCIC.

Despite having low charter capital, Cienco 8 is still considered a "leading bird" in traffic construction and has won bids for a series of large projects.

Before the IPO in 2014, Cienco 8 only had a charter capital of about 180 billion VND. Meanwhile, the construction output amounted to thousands of billion VND. In 2013, the Ministry of Transport agreed to increase Cienco 8's charter capital to 545 billion VND. This was the basis for Cienco 8 to bid and participate in many large projects in the transport sector.

SCIC divests 18% of capital from Cienco 8. (Photo: C8)

After the IPO of Cienco 8 in 2014, Cienco 8 gradually fell into the hands of Phuc Loc Group.

Immediately after that, the Cienco 8 - Phuc Loc joint venture won bids for a series of large projects such as the Bach Dang bridge project in Quang Ninh (VND 7,600 billion), and recently the XL 01 package of the Phan Thiet - Dau Giay expressway project with a value of VND 1,069.5 billion...

In fact, in the period 2013-2015, the Ministry of Transport promoted the equitization of transport enterprises (Cienco group). Of which, Cienco 8 was the weakest due to continuous losses.

Initially, selling capital at Cienco 8 was very difficult. In mid-2014, Cienco 8 auctioned more than 10 million shares, with a par value of VND10,000/share. However, only 26 investors registered to bid. Cienco 8 only sold 37,000 shares at an average price of VND10,000/share.

In August 2015, Cienco 8 continued to auction more than 19.1 million shares, starting at VND10,100/share, but only sold 43.5%.

After that, Phuc Loc Group and Mr. Luong Minh Tuong and his wife took control of Cienco 8. The State only held about 18%.

In 2016, Cienco 8 failed to increase its capital from VND590 billion to VND2,000 billion at the request of Mr. Luong Minh Tuong (Chairman of Phuc Loc Group). If the Ministry of Transport does not contribute capital, the Board of Directors of Cienco8 wants the State shareholders to agree that the major shareholders including Phuc Loc Group, Mr. Luong Minh Tuong and Ms. Dinh Thi Huong Giang contribute all the increased charter capital.

At that time, the State's share in Cienco 8 was reduced to about 5%. While Phuc Loc controlled the whole thing. However, the Ministry of Transport did not agree with this plan.

In recent years, Cienco 8 has recorded a decline in revenue, profit and assets. Cienco 8 is also stuck in many projects such as the BT project of Song Cau Thai Nguyen worth nearly 10,000 billion VND.

Cienco 8 has also been involved in many scandals, including being put under special surveillance in joint bid packages in the North-South Expressway project phase 1; being fined for violating environmental protection...

Currently, the obvious difficulty of Cienco 8 is still capital. Due to limited capital, Cienco 8's debt ratio is high and hinders business operations.

The general difficulties of the economy and financial markets over the past year may make Cienco 8 even more difficult.

"Leading bird" in the transport construction industry

Since 1989, Cienco 8 has participated in thousands of infrastructure construction projects such as: North Thang Long - Noi Bai Road, Lang - Hoa Lac Road, National Highway 1A, New National Highway 3, National Highway 5, National Highway 10, Trans-Asia Road, Ho Chi Minh Road, Hanoi Ring Road 3, Cau Gie - Ninh Binh Expressway; Da Nang - Quang Ngai Expressway, Ho Chi Minh - Trung Luong Expressway; Vinh Tuy Bridge, Thanh Tri Bridge, Non Nuoc Bridge, Coc Pai Bridge, Rut River Bridge, Rach Dua Bridge, Mong Sen Bridge.

Cienco 8 also participates in key national projects such as the North-South Expressway Construction Project, the Long Thanh International Airport Construction Investment Project and hundreds of other bridge and road projects in all provinces across the country.

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