Bamboo Airways capital increase plans fail

FLC Group subsidiary Bamboo Airways' planned charter capital increase was not allowed Monday due to the disapproval of 56.42% of voting shares.

At a Bamboo Airways extraordinary shareholder meeting on Monday, the firm presented for shareholder approval of its plans to issue 996.2 million shares in 2023, mobilizing nearly VND10 trillion ($425.55 million) and raising its charter capital to nearly VND28.07 trillion ($1.2 billion). The carrier's shares are coded as BAV.

Bamboo Airways' management proposed a plan to issue 772 million shares to swap debts into shares according to the agreement between creditors and the company. The issue price and expected swap rate are VND10,000 ($0.43) per share, equivalent to a swap ratio of 1:1, which means VND10,000 of debt will be exchanged for one additional share.

The total value of swapped debts including interest and principal amounts is until April 10, 2023. The list of creditors and debts for exchanges will be decided by Bamboo Airways' board of directors.

Besides, Bamboo Airways also plans to issue 185 million shares to new investors, with an expected unit price of VND10,000.

The list of investors participating in the purchase of individual shares and the number of shares offered to each investor would be selected and approved by the board of directors. All additional shares are not subject to transfer restrictions and are prioritized for sale to existing shareholders of Bamboo Airways based on the ratios of existing share ownership.

Regarding stock listing, Bamboo Airways deputy CEO Nguyen Khac Hai said that under Vietnamese regulations, it must be profitable for two consecutive years if listed on the Ho Chi Minh Stock Exchange, and one year if listed on the Hanoi Stock Exchange. The company will try to list as soon as possible if qualified, he said.

He added that Bamboo Airways is not a signatory to the commitment to buy back BAV shares of former chairman Trinh Van Quyet, so it cannot answer questions about these shares. Besides, the commitments of the former chairman are not within the scope of the meeting, therefore the carrier would respond at its 2023 annual general meeting in the time to come.

Quyet, the chairman of FLC Group, was arrested in March 2022 for alleged stock manipulation.