VF1 to Adjust Issuing Price

Mr Tran Thanh Tan: "VF1 has to choose a least damaging solution amongst all". (Photo: T.C)

In early August, the Viet Nam Fund Management Company (VFM) announced the lowering of issuing price applied in the second phase of its raising chartered capital for the Viet Nam Securities Investment Fund (VF1) to make the issuing price appropriate with the bearish stock market.

According to VFM, the adjustment has been approved by the State Securities Commission (SSC). All the fund holders, in the list finalized on July 20, will have the rights to buy fund certificates issued in the second phase at the price of VND 18,167 instead of VND 24,222 per fund unit as announced on July 17.

According to the fund’s plan, the issuance of 20 million fund certificates each at the par value of VND 10,000 is conducted in 2 phases.

In the first phase, 12 million of fund certificates will be offered to existing investors, who have the right to buy 4 fund units at par value for every 10 fund units owned.

In the second phase, 8 million of fund certificates will be offered to existing investors at the ratio of 15:4. The issuing price will be based on the fund’s net asset value (NAV). Also in this phase, investors will receive the first stage dividend of 2006 (6%) in advance.

With the adjustment, existing fund holders can buy additional fund certificates at more reasonable price, making the issuance more viable. However, new investors are at a loss.

Explaining for the adjustment, General Director of VF1 Tran Thanh Tan believed that the dropping of many stocks leading to the delay of the share sale of some listed companies is due to the fact that the issuing prices are well over the market price. The investment fund VF1 is not exceptional. He also worried about the success of 20 million fund certificates to be offered to existing investors.

Lowering the issuing price is an unwilling action for VFM at the moment. However, VF1 has to choose a least damaging solution. The solution, according to VF1 management, is the best for the market harmony, protecting the interest of most investors. However, it cannot harmonize the interests of all parties.

On August 8, VF1’s certificate VFMVF1 closed at VND 20,400.

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Reported by Cat Tri

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