Steel producer Pomina battles mammoth debts
Vietnamese steel firm Pomina has found itself in a crisis with VND2.2 trillion ($90.67 million) and VND922 billion ($38 million) in overdue bank and supplier debt respectively, and many of its owners have had to sell millions of shares to clear debts with suppliers.
Surrounded by difficulties
Pomina, listed on the Ho Chi Minh Stock Exchange (HoSE) as POM, was established in 1999, and held a large construction steel market share before 2013. However, Pomina is now facing the most difficult period in its history.
The construction steel industry has been in a recession since last year due to the frozen real estate market and falling consumer demand. In 2022, Pomina reported a 7% year-on-year revenue decrease to VND13 trillion ($535.8 million) and a record loss of VND1 trillion ($41.2 million). The situation did not get better in the first nine months of this year when its revenue plunged 73% to VND2,948 billion ($121.44 million), with a further loss of VND647 billion ($26.65 million).
Besides the general context, Pomina has also encountered internal difficulties as it depends heavily on debt. At the same time, its investment projects did not bring about the expected results, even becoming a burden in the deteriorating steel market.
The enterprise has maintained debts worth VND7 trillion ($288.5 million), double its equity for many years, with interest costs per year reaching about VND350-400 billion ($16.5 million). The losses have further worsened Pomina's financial indicators. As of September 30, the company had total debt of VND6.35 trillion ($261.58 million), three times higher than equity, including VND5.2 trillion in short-term debt and VND1.15 trillion in long-term debt.
According to the firm's semi-annual financial statement, the auditor noted that Pomina had VND2.2 trillion and VND922 billion in overdue bank and supplier debts, respectively.

The Pomina plant 2 in Phu My Industrial Park, Ba Ria-Vung Tau province, southern Vietnam. Photo courtesy of the company.
In 2009, when the economy started showing signs of recovery after the crisis, Pomina decided to invest in the largest steel mill in Vietnam at that time with a capacity of 1 million tons per year in the southern province of Ba Ria-Vung Tau (Pomina 3). The factory went into operation in 2012 but the efficiency was not as expected due to economic difficulties, incurring losses for two consecutive years from 2013-2014.
It was not until 2017 that Pomina generated revenue equal to the period before the Pomina 3 mill was put into operation. Two years later, the leadership decided to invest in a blast furnace project at Pomina 3, which was completed and put into production in 2021. But once again, the steel market plummeted, the company faced difficult sales but still bore the financial costs of the new projects. Until the end of the third quarter 2023, the Pomina 3 mill was still shut down. The company expects the factory to resume operations immediately after its private placement of shares to investors.
Selling shares to clear debt
To overcome difficulties, the steel producer said it is actively working with banks to seek their help with maintaining credit quotas, rescheduling loans, and extending loan terms.
Pomina has also found a strategic investor who will pour about VND700 billion ($28.85 million) into the company. That is Nansei Steel Co., Ltd. of Japan. Pomina is implementing the first phase of the private placement with 10.6 million out of 70 million shares approved by shareholders. The proceeds will be used to pay debt at VietinBank. If all the 70 million shares are successfully issued, Nansei will own 20% of the Vietnamese steel maker’s charter capital.
Pomina is a family company with the ownership group holding over 70% and the board of directors mainly from the Do family. However, since June 2023, relatives of chairman Do Duy Thai have sold millions of shares. Pomina said that the share sales were to clear debt with suppliers. Under the agreements, the total number of POM shares being used to cover debt is about 21 million worth VND188 billion ($7.75 million), or 7.5% of Pomina’s charter capital.
Specifically, Do Thi Nguyet, an older sister of Thai, registered to sell all 1.2 million POM shares from December 21 to January 4, 2024. Transactions will be carried out by the put-through or order matching method. Previously, from November 22 to December 15, Nguyet successfully sold 3.3 million out of 3.5 million registered POM shares.
A younger sister of Thai, Do Thi Kim Ngoc, also registered to sell 5.5 million POM shares from December 7 to January 4, 2024. If the transaction is successful, she will hold only 2.35 million POM shares, equivalent to a 0.84% stake.
From November 22 to December 15, Do Nhung and Do Thi Kim Lang, two other younger sisters of the chairman, also sold all of their respective 6.57 million and 353,788 POM shares.
The total shares successfully transferred since mid-year by individuals related to the chairman is more than 14 million while the number of remaining registered shares is 6.7 million.
The largest and founding shareholder of Pomina is Viet Steel Co., Ltd, holding 146 million shares, equivalent to 52.3% of the company's charter capital. Viet Steel was established in 1992, playing the role of distributing all steel products of Pomina 1 mill in Binh Duong province and Pomina 2 and 3 in Ba Ria-Vung Tau province. The chairman of Pomina is also the CEO and legal representative of Viet Steel.
In the stock market, POM closed Thursday at VND5,120 ($0.21) per share.
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