What did CII General Director say about selling all CII shares right before the congress?

What did CII General Director say about selling all shares to buy bonds?

On the morning of October 17, 2023, the 2023 Extraordinary General Meeting of Shareholders of Ho Chi Minh City Infrastructure Investment Joint Stock Company (Code CII) was held for the second time. There were 95 shareholders attending the meeting, representing 96.9 million shares, accounting for 34.13% of charter capital.

Notably, CII General Director Le Quoc Binh gave an explanation for why he and his wife sold all CII shares to buy the company's convertible bonds.

CII General Director explains the sale of all shares (Photo TL)

According to Mr. Binh's explanation, the purpose of selling all shares and buying convertible bonds is to transfer the position from shareholder to creditor. Mr. Binh added that this is a long-term investment in CII, holding bonds, the number of bonds when converted will be more shares. As for himself, when he retires, he will not think about holding CII anymore.

Previously, Mr. Le Quoc Binh registered to sell all 6 million shares he held by order matching or negotiation from October 10 to November 8. The expected amount of revenue is about 112 billion VND at market price. The above incident has caused quite a stir among CII shareholders.

Mr. Binh's wife, Ms. Pham Thuy Hang, also sold all 4 million shares to reduce her ownership from 1.41% to 0% of charter capital. The transaction is also expected to take place from October 10 to November 8. The purpose of the divestment of Mr. Binh and his wife is to invest in buying CII's convertible bonds with code CII42301.

This makes many shareholders wonder because the change of position from shareholder to creditor will theoretically give General Director Binh and his wife priority in handling CII's assets in case the enterprise goes bankrupt.

Debt up to 13,000 billion, CII wants to restructure assets

One of the current outstanding problems of CII is that the amount of debt accounts for the majority of the enterprise's capital structure. At the end of the second quarter, CII's total assets reached VND 26,649.2 billion. Of which, VND 954.6 billion was in cash. Along with VND 2.5 billion in bank deposits and VND 615.6 billion in securities investments.

Notably, short-term debt accounts for VND6,039.4 billion, long-term debt accounts for VND7,112.3 billion. CII's total debt has now reached VND13,151.7 billion, not to mention other payable obligations. Compared to equity, CII's debt is 62.2% higher.

Also on the issue of debt, in CII's Q2 business results report, financial expenses increased by 41.2% to VND454.8 billion. Of which, interest expenses alone accounted for VND363.6 billion. This means that CII is paying VND4 billion in interest every day.

In the documents of the 2nd extraordinary shareholders' meeting, CII also raised this issue with the solution of issuing convertible bonds to restructure capital sources and reduce the debt-to-equity ratio.

Accordingly, the company plans to issue a total of 7,000 billion VND in bonds. Including 2,400 billion VND in 10-year bonds guaranteed by foreign credit institutions. 4,500 billion VND in convertible bonds for shareholders, with a term of 10 years.

CII plans to study 6 BOT projects with total investment of 75,000 billion

With debt exceeding equity by 62.2%, along with the pressure of interest payments of up to 4 billion VND per day, CII is still confident in announcing the research of 6 new BOT projects with a total investment of 75,000 billion VND. Including:

Ho Chi Minh City - Trung Luong - My Thuan Expressway Phase 2 with 22,000 billion VND; Improving traffic capacity in the Northwest area of ​​Ho Chi Minh City with 19,059 billion VND; Upgrading and expanding National Highway 1A from Tan Kien intersection to Long An border with 11,982 billion VND; Project to improve traffic capacity along Pham Van Dong - Nguyen Xi - Ung Van Khiem - Nguyen Huu Canh route with 10,108 billion VND; Upgrading and expanding North-South axis project from Nguyen Van Linh to Ben Luc Long Thanh Expressway with 6,625 billion VND; Upgrading and expanding the connecting route of Ho Chi Minh City - Trung Luong Expressway with 5,048 billion VND.

Source: https://www.congluan.vn/tong-giam-doc-cii-noi-gi-ve-viec-ban-toan-bo-co-phieu-cii-ngay-truoc-them-dai-hoi-post268890.html