Thaco to set up new company to take over non-auto businesses

By Minh Son May 10, 2020 | 08:22 pm PT

KIA cars seen in a plant of Thaco in Chu Lai Open Economic Zone, the central province of Quang Nam. Photo courtesy of Thaco.

Truong Hai Auto Corporation (Thaco) plans to restructure by spinning off its agriculture and real estate businesses to form a new company, Thaco Group.

The leading automaker recently told its shareholders it proposes to issue new shares to increase its capital by 80 percent to VND30.5 trillion ($1.3 billion). Of this, 63 percent, or VND19.3 trillion ($826 million), will be transferred to Thaco Group, the new company.

The ownership of the new company will follow a similar pattern as that of Thaco: chairman of both companies, Tran Ba Duong, and his family will own over 70 percent, Singapore-based investment firm Jardine Cycle and Carriage (JC&C) will own 26.3 percent, and employees and the public the rest.

Its shares are not listed and trade on the OTC market.

Last year auto sales topped VND46.3 trillion ($2 billion), accounting for 82 percent of the company’s total revenues of VND55.4 trillion ($2.4 billion).

The company has been investing steadily in agriculture, making three major acquisitions of rubber and fruit companies for over VND7.6 trillion ($324 million) last year.

Income from the farm last year was VND1.5 trillion ($64 million) and the loss was VND15 billion ($640,600), the company said.

Thaco’s real estate subsidiary, Dai Quang Minh, develops apartment projects in the Thu Thiem New Urban Area in District 2, Ho Chi Minh City, and an office, hotel and mall complex in Yangon, Myanmar.