Vietnam Prosperity Joint-Stock Commercial Bank (VPBank stock code: VPB) has just announced the collection of written comments on a number of important issues.
Acquisition of up to 122 million treasury shares
Specifically, VPBank’s Board of directors submits to the general Meeting of Shareholders for consideration and approval of the bank’s stock repurchase plan as treasury shares. The total number of shares registered to repurchase is a maximum of five percent of the outstanding shares equivalent to nearly 122 million shares, in order to support transactions and increase shareholder value. Transactions is expected to conduct in 2020, by order matching method or agreement.
Acquisition of international bonds, up to $300 million
VPBank also wants to repurchase bonds issued under the euro Medium Term Note programme and listed at foreign stock exchanges.
Earlier, in June 2019, the bank approved the plan of offering international bonds, whereby it successfully issued in the first phase with a total value of $300 million.
However, VPBank said that due to the global crisis related to Covid-19 pandemic, the international corporate bond market was sold off quite strongly, so VPBank’s bonds registered in Singapore are currently trading at much higher than the IPO time. This could be a disadvantage for VPBank in mobilising other domestic and foreign sources of funding, especially loans from international banks with much lower interest rates.
The acquisition of issued international bonds of VPBank will enhance the reputation of the bank on Eurobond market, proving that VPBank’s liquidity situation is stable, improving VPBank’s reputation at home and abroad, creating conditions for the bank to issue bonds in the international market later when necessary and when the international market stabilises.
The amount of bonds that VPBank wants to repurchase is up to the maximum volume of bonds issued, with the implementation period in 2020 or 2021 depending on the market conditions.
VPBank also tried to obtain shareholders’ consent on the reduction of foreign ownership ratio from 22.77 percent to 15%. The reason is that in recent years, due to the financial crisis from the impact of the disease, foreign investment funds (especially from the US and Europe) have tended to withdraw from Asian stock markets. A number of foreign shareholders of VPBank are not out of this trend and thus a number of shares have been sold. Currently, foreign investors’ ownership to chartered capital of VPBank has decreased by 0.34 percent compared to the above closing level. Due to the complicated global epidemic situation, this trend may not stop yet.
VPBank’s Board of directors said that this was an opportunity for VPBank to retain its foreign ownership ratio, in order to offer to other foreign shareholders who want to invest in the bank when the financial market actually returns to stability, so there could be a chance to create a capital surplus directly for the bank.
VPBank also submits to shareholders for approval of the online shareholders ‘meeting, collecting shareholders’ opinions, sending invitations, documents and opinion cards via the email addresses of shareholders.
The reason is that the disease is complicated and a number of forms of social separation are required by the government. In addition, in actual operation, with a very large number of shareholders, the fact that VPBank uses delivery service of a third party to sent mail to the permanent address of shareholders is ineffective, time-consuming and costly for printing, delivery packaging, etc.
