Bamboo Capital plans 50% charter capital increase to achieve ‘spectacular’ growth targets

Bamboo Capital Group JSC, listed on the Ho Chi Minh Stock Exchange as BCG, has finalized the list of existing shareholders as it plans to raise its charter capital by 50% to service debt and finance operations.

BCG seeks to raise VND2,667 billion ($104.8 million) from issuing 266.73 million shares at VND10,000 ($0.39) apiece.

If successful, the firm will lift its charter capital to VND8,000 billion ($314.3 million) from VND5,335 billion.

The shares will be offered at a 2:1 ratio on record as of May 13, which means existing shareholders of this date will be eligible to buy 50 shares for each 100 shares they own.

Buying options can be transferred from May 16 to 30, 2024 only once and cannot be resold to a third person. Interested buyers can register to buy and pay between May 16 and June 4.

Of the proceeds, estimated at VND2,667 billion ($104.8 million), BCG plans to supplement capital to serve business activities and restructure its debt-to-equity ratio, thereby increasing capital resources at hand in order to stay aligned with its total asset value.

The rights offering will also help Bamboo Capital increase its internal resources and will bring better value to shareholders in the long term, group leaders said.

In January 2022, BCG successfully sold 148 million shares at VND12,000 ($0.47) each to existing shareholders, raking in VND1,785 billion and increasing its charter capital to VND4,463 billion. As of March 31, 2024, Bamboo Capital’s charter capital stood at VND5,335 billion and owner’s equity at VND17,673 billion.

At the group’s AGM on April 27, shareholders approved a 2024 business plan to earn revenues of VND6,102.5 billion ($239.8 million) and an after-tax profit of VND951.7 billion. This year, BCG expects revenue and profit to grow 152% and 556% year-on-year, respectively.

It recorded net revenues of VND985.4 billion ($38.7 million) in Q1/2024, up 40.5% year-on-year. Main revenue sources were renewable energy (VND320.4 billion), accounting for 32.5% of the total; infrastructure construction (VND222.1 billion), 22.5%; real estate (VND209.8 billion), 21.3%; and financial services (VND185.7 billion), 18.8%.

Bamboo Capital’s Q1 consolidated after-tax profit soared more than 10 times year-on-year to VND98.2 billion ($3.86 million).

It expects revenues to grow 50% annually on average in the 2024-2028 period, reaching VND30,475.2 billion ($1.2 billion) in 2028. Its after-tax profit is projected to hit VND4,535.6 billion in 2028.

To achieve such spectacular growth, Bamboo Capital needs to secure financing for a series of large-scale projects, its leaders have said.

BCG closed Monday at VND8,450 ($0.33) apiece, while the shares have book value of VND33,100 each.

Speaking at the group’s AGM late last month, Bamboo Capital leaders said that although BCG's current market price was much lower than its book value and lower than the price to be issued, many institutional and individual investors had shown interest in buying shares at the upcoming issuance, recognizing the group's growth potential.

After completing the rights offering, Bamboo Capital will continue to implement a plan to issue bonus shares to shareholders. It plans to issue 80 million shares at a 100:10 ratio, meaning shareholders owning 100 shares will receive 10 bonus shares.

After the two issuances – 266 million shares to existing shareholders and 80 million bonus shares, BCG's charter capital will increase to VND8,800 billion ($345.73 million).