Largest state-owned film studio to IPO after 20 years of losses

By Bach Duong, Bui Hong Nhung   March 28, 2016 | 10:48 pm PT
Vietnam Feature Film Studio (VFS) is about to sell 80 percent of its shares for the first time on April 4.

After the IPO, VFS’s charter capital could reach VND50 billion ($2.2 million), equivalent to five million shares. The Vietnamese government is going to retain a 20 percent stake; employees will hold a 4.5 percent stake; 10.5 percent will be auctioned to the public; and the remaining 65 percent will belong to the strategic investor, Water Transport Corporation.

VFS, the largest state-owned film studio, was founded in 1953 and produced its first movie in 1959. In recent years, the company has suffered consecutive losses due to insufficient budgets, and an outdated production line.


An image from "Living with history" - The biggest budget movie produced by VFS

To date, VFS has accumulated a VND39.6 billion loss ($1.78 million). The company also owes VND5.7 billion in land use taxes. The average annual income of its employees in 2014 was VND30 million, below the national average of VND40 million.

The only attraction to draw investors to purchase VFS’s shares is its highly valued properties, which include 5.500 square meters on Thuy Khue Street and 905 square meters on Hoang Hoa Tham Street, two major streets in Hanoi.

After the IPO, VFS expects to expand its business to include restaurants or exporting home-grown commodities. It has set a VND45 billion turnover target for 2016.

State-owned Water Transport Corporation, VFS's main investor, has a charter capital of VND320 billion. The company also recorded a loss of VND8 billion for the first nine months of 2015.

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