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Top mining company to de-list shares   2010-10-13 - Viet Nam News

Sai Gon Quy Nhon Mining Co (SQC) will seek shareholder approval to suspend its listing on the Ha Noi Stock Exchange due to unfavourable business conditions, the company’s general director, Tran Trieu Thanh, told a press conference on Monday.

 
The company operates the Sai Gon Quy Nhon titanium slag plant, the first plant in Viet Nam to produce titanium slag at a purity of 93 per cent. However, production at the plant has been suspended due to the imposition of high export taxes.

The export tax levied on titanium slag is currently 15 per cent – down from an earlier 18 per cent but still too high for the company’s exports to remain competitive.

To cope with the high tariff and attempt to cut its losses, Sai Gon Quy Nhon Mining Co began reducing capacity at the plant in July this year, Thanh said.

Suspending the loss-making slag production operations entirely actually would improve the company’s bottom line, Thanh said, hinting that production could resume in the first quarter of 2011, when tariff changes could be possible.

Meanwhile, the suspended operations were having a negative impact on share value, prompting the management’s decision to de-list, pending shareholder approval.

The company’s leading shareholder, Dang Thanh Tam, said the blue-chip shares had a large impact on movements of the HNX-Index.

"Many people said that SQC distorted the market," Tam said. "We could listen to this 10 times, but we couldn’t listen to it 20 times."

In response to the concerns of small shareholders, Tam said, the company’s management board planned to buy back shares from any investors that no longer wished to invest in the company.

Changes in tariff policies would be decisive as to how long the listing would be suspended, Thanh said.

"I believe the State will soon realise our difficulties and make proper changes to support our production," he added

The management board has also announced other matters requiring a vote of shareholders, including adjustments to business targets of this year, the plan to buy out smaller stakeholders, and collaboration with Japanese and US partners in titanium production and establishing a global distribution network.



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