Transport giant to withdraw capital from leading HCMC taxi firm

Just months after saying it intends to increase its stake in Vinataxi, renew its fleet and install driver software, the Transport and Industry Development Investment Corporation (Tracodi) has decided to pull out.

Tracodi has authorized Nguyen Thanh Hung, its general director and vice chairman, to seek investors and negotiate a transfer price not lower than the net present value of Vinataxi shares calculated according to book value.

Vinataxi is a joint venture between Tracodi and electronic component distributor Tecobest Hong Kong, established in 1992. In 2003, Tecobest transferred capital management rights to ComfortDelGro, the leading public passenger transport operator in Singapore.

According to the consolidated financial statement of the third quarter, Vinataxi occupied the third largest market share in Ho Chi Minh City with a chartered capital of VND113 billion ($4.84 million). Tracodi's initial investment value was approximately VND34 billion ($1.46 million) in the joint venture.

Tracodi’s capital withdrawal is in stark contrast to the plan announced by its board at its annual general meeting mid-June. Then, the corporation announced it wanted to negotiate raising its ownership ratio in Vinataxi to 49 percent, and coordinate with ComfortDelgro Savico Taxi, a joint venture between ComfortDelgro and Saigon General Service Corporation, to renew their fleets and install driver software.

Tracodi’s management board estimates the firm will reap net profit of VND8 billion ($342,916) from its taxi business line this year with its combined fleet of over 300 cars.

In 2017, revenues and after tax profit of Vinataxi reached over VND47 billion ($2.01 million) and VND1.2 billion ($51,431) respectively.