Hoang Anh Gia Lai Group (HAGL) has finally confirmed it is negotiating with Thanh Thanh Cong (TTC) to transfer its sugar mill in Laos to TTC – both companies are giants in their field, Vietnam’s local media reported this week.
TTC is known as the leading player in the industry as it holds the controlling stake in many large sugar companies, including Thanh Thanh Cong Tay Ninh (SBT), Gia Lai Hydropower Sugar (SEC), Bien Hoa (BHS), Ninh Hoa (NHS) and Phan Rang Sugar Company, Vietnamnet reported.
HAGL has 6,000 hectares of sugarcane in Laos, with favourable conditions which allow yields of 120 tonnes per hectare.
Lao Investment Promotion Law’s Article 65 permits investors to handover, transfer, withdraw or increase capital of their enterprises. The law’s Article 75 also states that shareholders can also be changed.
Vietnam Breaking News (VBN) reported on October 5 that HAGL might sell the plant to TTC partially or wholly. The two parties were expected to inform their shareholders of the planned deal sometime next month.
HAGL used to sell raw sugar produced at its plant in Laos to TTC for refining. At present, HAGL exports part of its output from the Laos sugar plant into Vietnam for sale and volume stood at 50,000 tonnes last year. This year, the Ministry of Industry and Trade of Vietnam had set an import quota of 30,000 tonnes of sugar from Laos and the figure would remain the same in 2017, according to VBN.
In 2013, the company said it would invest US$19.1 million in a sugarcane farm in the neighbouring country. Its sugar mill has a daily capacity of 7,000 tonnes.
According to HAGL’s financial report announced on August 23, the firm racked up losses of more than VND1.07 trillion (US$48.2 million) in the first six months of this year. In the same period last year, it reported a profit of VND1.04 trillion.
The company, which has invested in various fields in Laos, recently reported that it may sell 20,000 hectares from 40,000 hectares of rubber plantation in Laos to Chinese partners in the event its proposed debt restructuring plan falls through as the company has been plagued by financial woes over its loss-making agricultural arm, according to Vietnam’s Tuoi Tre News last month.
HAGL has received support from the State Bank of Vietnam on its proposed bail out solutions, but the plan still needs the final approval from the government.
Source: Vientiane Times