Green Land Group will increase its charter capital to more than VND3 trillion by way of paying dividends to shareholders and issuing ESOP shares by 2017.
Mr.Luong Tri Thin, Chairman of Dat Xanh Real Estate Services and Construction JSC has just signed a resolution approving the increase of chartered capital from over VND253,0 billion to nearly VND303,3 billion.
This capital increase will be implemented in phases. At the first stage, Green Land will issue nearly VND33 million shares to pay dividends in 2016 at the rate of 13%. The chartered capital increased by VND329 billion.
In the second phase, the company will continue to issue more than VND14.3 million shares to pay dividends in 2017 and VND3 million preferred shares for employees in the company – ESOP. Total chartered capital increased after this period is nearly VND173 billion.
In 2015, Dat Xanh also mobilized for the issuance of individual shares to increase charter capital from VND750 billion to VND100,7 billion. According to the initial capital plan, VND173 billion will be invested in the Opal Riverside project and nearly VND84 billion for the Green City project.
At present, the Board of Directors of Dat Xanh Group has changed the purpose of use of nearly VND84 billion, previously invested in Green City project to transfer working capital.
Green Land also decided to invest VND712.5 billion to cooperate with Saigon Real Estate Joint Stock Company to set up Saigon Riverside Investment Limited Company. Specifically, Saigon Riverside Investment Limited Company will be established with the total chartered capital of VND950 billion.
In particular, Saigon Real Estate Company will contribute VND237,5 billion and 25% of charter capital, the remaining 75% of Dat Xanh with VND712.5 billion. The purpose of this capital contribution is to jointly develop SaigonRes Riverside project in Hiep Binh Chanh Ward, Thu Duc district, Ho Chi Minh city.
So from 2015 to now, the chartered capital of Green Land has increased four times, from VND750 billion to more than VND3,000 billion. This is the consequence of Green Land continuously expanding land fund, M & A major property projects in the coastal city.
Only in 2016, Dat Xanh has M & A more than 10 property projects in Ho Chi Minh City. This company has poured in more than VND2,000 billion, the right to develop more than 120,000sqm of land with a total investment of about VND10.000 billion. In addition, Green Land also has a series of other projects are “blanket”.
The common point of all these projects is that Green Land is almost exclusively developed, not joint ventures, affiliated with other partners. This has led many people to believe that the financial foundation of Green Land is strong. In fact, the company must continuously raise capital through the issuance of shares and bonds to increase charter capital.
Green Land issue 3 million preferred shares to employees in the business will certainly cause damage to shareholders. ESOP stock is one of the ways to encourage employees to work effectively. However, if the excessive incentive scheme causes damage to shareholders.
Specifically, the issuance of 3 million ESOP shares is equal to VND10,000 par value. In two rounds with a total of 47.3 million shares, Green Land has not completed the plan and is expected to follow the market price.
Currently, on HOSE, DXG’s shares of Dat Xanh Group are trading around 18,200 dongs, nearly double the face value of ESOP shares that the company is about to issue. Thus, workers who have been working in the Green Land have bought 82% of their income.
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