Bach Hoa Xanh plans to sell up to 10% of shares

Instead of selling 20% ​​of shares as originally planned, Bach Hoa Xanh only offered at 5-10% because it did not need to raise much capital.

According to the recent resolution of Mobile World Investment Corporation (MWG), the capital mobilization plan of the food and essential consumer goods retail chain through Bach Hoa Xanh Investment Company will change. Specifically, the number of shares offered for sale is expected to range from 5% to a maximum of 10%, depending on the actual capital needs of Bach Hoa Xanh Investment Company and its subsidiaries at the time of capital mobilization.

"With positive business results and cash flow developments in 2023, Bach Hoa Xanh does not need to mobilize capital up to 20% as originally planned," the resolution stated.

The share offering is expected to be completed in the first half of this year. The proceeds will be used to finance the chain's operations.

Previously, the market reported that Bach Hoa Xanh had signed a deal to sell 10% of its shares to CDH Electric Bee Fund - a major shareholder in the 2013-2018 period. However, a representative of MWG told VnExpress that the information was incorrect. Up to now, the deal to sell shares of this food and essential consumer goods chain has not been completed.

A Bach Hoa Xanh store on Nguyen Duy Trinh Street (Thu Duc City, Ho Chi Minh City), July 2021. Photo: Tat Dat

According to the original plan, the issuers were partners and investors in the region or around the world , except for direct competitors in Vietnam. The valuation of the share purchase offer was not specified, MWG only said it would be at a "reasonable" level. At the end of September 2023, Reuters reported that Bach Hoa Xanh's valuation was around 1.5-1.7 billion USD, but was rejected by MWG.

Bach Hoa Xanh is a food and essential consumer goods retail chain under MWG. Established in 2015, this chain is considered a "favorite child", expected to bring in billions of dollars in revenue and lead the domestic consumer goods retail industry. However, after many mistakes, Bach Hoa Xanh continuously suffered losses with a cumulative amount of up to 8,300 billion VND.

From the second quarter of 2022, MWG decided to restructure this chain. They closed 400 stores in a short time, so far only retaining more than 1,697 points of sale. The company stopped expanding its network to eliminate product groups with poor business performance, focused on changing the layout, and handling ineffective stores. Bach Hoa Xanh changed its positioning from a "modern market" model to a "mini supermarket".

In recent months, this chain's revenue has grown well and has become the only bright spot in Mr. Nguyen Duc Tai's retail "empire". According to the plan, Bach Hoa Xanh can break even by the end of 2023. Whether or not this target is achieved will be announced in the full-year business results report expected at the end of January.

Siddhartha

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