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Listed construction firms eye merger   2009-03-29 - VietNamNet/VNS

Two listed construction enterprises, Song Da No 6 and Song Da 6.04, are discussing a possible merger which, if it takes place, would be the first between two companies on the nation’s stock exchanges.

The shareholders meeting of Song Da 6.04 on Thursday unanimously approved a proposal by a member of the company’s management board that the two firms merge, according to a local online newspaper.

An official of Song Da No 6, on condition of anonymity, confirmed the information to Viet Nam News in a telephone interview yesterday.

"We have now reached in-principle agreement with the shareholders," said the official. "But there has never been a merger between two listed firms on the local exchange, so the next step is seen as a big challenge for us."

Song Da No 6 already holds a 41-per-cent interest in Song Da 6.04.

With a charter capital of VND20 billion (US$1.14 million) and an equity of VND160 billion ($9.1 million), Song Da 6.04 lacked the capacity to handle major contracts which could help it more strongly establish its name in the local market, said Ho Sy Hung, who represents Song Da No 6’s stake on the board of Song Da 6.04.

Song Da 6.04 still regularly asked for help from Song Da No 6 in financing their projects, Hung said. "That’s why these two companies should merge," he added.

Song Da No 6 would take the lead role in the merger and was drawing on advice from the ACB Consultancy Co on possible ways of structuring the transaction, including withdrawing Song Da 6.04’s listing and have Song Da No 6 acquire all of its assets.

Another listed firm, Song Da 6.06, was also planning to merge with Song Da No 6, but the company’s shareholders have not yet met to consider the deal.

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