Bamboo Capital to partner with strategic investor to boost infrastructure segment

Bamboo Capital Group will transfer 21 million shares of its construction subsidiary Tracodi to a strategic partner experienced in infrastructure development in an effort to increase the firm’s competitiveness and seize opportunities from large-scale public investment projects.

Bamboo Capital Group, listed on the Ho Chi Minh Stock Exchange (HoSE) as BCG, on Monday approved the sale of 21,040,000 out of its total 145,130,507 TCD shares in Tracodi. The deal is expected to be made from June 5 to July 5 in the form of put-through transactions at market prices at the time of transaction.

Bamboo Capital also approved the appointment of key leaders as its representatives for the remaining stake in Tracodi. Nguyen Thanh Hung will manage more than 49.6 million shares, or 17.66% of Tracodi's charter capital; Nguyen The Tai more than 37.2 million shares, or 13.24%; and Pham Dang Khoa more than 37.2 million shares, or 13.24%.

Bamboo Capital now holds 51.63% of Tracodi’s charter capital. After divesting the 21 million shares, equivalent to 7.49%, the group’s ownership rate will drop to 44.14%, but Tracodi will remain a member of the Bamboo Capital ecosystem.

Despite this 44.14% ratio, Bamboo Capital and its senior leaders will still hold dominating stakes in Tracodi, so the divestment will not affect voting on major policies, thus maintaining the long-term strategy and vision set for Tracodi.

The buyer has not been disclosed yet, but at the 2023 BCG annual general meeting, Bamboo Capital revealed that it is planning to develop Tracodi under the model of an infrastructure-construction corporation, and will increase its competitiveness by inviting a strategic partner to join the company.

A representative from BCG said that the buyer will become a strategic partner who will help to develop Tracodi and seize opportunities in the infrastructure segment.

Tracodi was established in 1990. After a successful M&A and restructuring plan by Bamboo Capital in 2015, Tracodi became an important member company of the group, in charge of the construction and infrastructure segment.

In 2017, Tracodi was listed on the HoSE as TCD. With current charter capital of more than VND2.44 trillion ($104 million), it is the main contractor for many real estate and renewable energy projects run by Bamboo Capital.

In addition, Tracodi also undertakes important infrastructure projects, including a taxiway for Phan Thiet Airport in the south-central province of Binh Thuan; a residential area and a reservoir adjacent to the Duc Thang residential area in Hiep Hoa district, the northern province of Bac Giang; and National Highway 3-Vo Nguyen Giap-Dong Anh road in Hanoi.

From 2024-2027, the company will build the Go Dau-Xa Mat Expressway in Tay Ninh, Duc Hoa-Duc Hue Road in Long An, and provincial road 935 in Soc Trang.

This year, Tracodi has set a target of raking in VND3.3 trillion ($141 million) in consolidated net revenue, a year-on-year increase of 13%, and over VND267 billion ($13.39 million) in consolidated after-tax profit, down 20%.

In Q1/2023, the company recorded revenue of more than VND314 billion ($13.36 million), and after-tax profit of VND68 billion ($2.89 million), equivalent to 10% and 25% of the year's targets, respectively.

BCG closed the Monday session at VND9,780 ($0.42), while TCD hit VND8,520 ($0.36).