Bamboo Airways plans share issuance to lift charter capital to $1.2 bln

Bamboo Airways, a subsidiary of Vietnamese group FLC, plans to issue 996.2 million shares in 2023, mobilizing nearly VND10 trillion ($425.55 million) and raising its charter capital to nearly VND28.46 trillion ($1.2 billion).

The company on Thursday announced an invitation to its extraordinary general meeting of shareholders to be held on April 10 to approve the plan on private share replacement.

The issuance size is equivalent to a maximum 35% of Bamboo Airways's post-issuance equity, and the new shares will not be restricted for transfer.

According to chairman Nguyen Ngoc Trong, the purpose of the issuance is to continue restructuring the company and its debt, and increase its charter capital.

On the same day, FLC Group sent a document to the Hanoi Stock Exchange (HNX), the State Securities Commission and the Ho Chi Minh City Stock Exchange (HoSE) outlining a roadmap to overcome information disclosure violations so that FLC shares can resume trading again on the unlisted public company market (UPCoM).

Last week, CEO Nguyen Manh Quan said Bamboo Airways had found a new investor to replace former FLC chairman Trinh Van Quyet and other shareholders.

Over the past year, in order to maintain and develop operations, Bamboo Airways has been looking for new investors who can provide the airline with financial resources and restructuring experience, he said in an interview with the government portal.

“The airline has actively helped the investor with relevant procedures for the stake acquisition, which is under authorities’ supervision in line with the law,” he said, adding that the name of the new investor will be disclosed in the near future.

The transferred stake was mortgaged from 2020 by previous shareholders, Quan added.

The new investor has also agreed to take responsibility for all payments of loans taken out by previous shareholders who used their stakes in Bamboo Airways as collateral.

Bamboo Airways was established by FLC in late May 2017 with an initial charter capital of VND700 billion ($29.6 million).

Trinh Van Quyet, who has been detained since March last year on charges of “manipulating” and “concealing information in securities activities”, had poured over VND2.8 trillion ($118.4 million) into the airline, or a 40.03% stake. Other shareholders injected more than VND610 billion ($25.8 million), an 8.73% share.

In April 2022, FLC became the airline’s largest shareholder, with capital contributions totaling over VND3.58 trillion ($151.4 million), or a 51.24% stake. In its recent financial statement, FLC’s ownership in Bamboo Airways fell to 21.7% of its total charter capital of VND18.5 trillion ($782.3 million).