The proposed price is 31% higher than the market price, according to the Group's letter send to Vietnam Electricity (EVN). At this price, Hyosung would need at least VND1.18 trillion (US$51.62 million) for the deal to be completed.
220Kv power transformer produced by EEMC.
|
Substantially, the move is in line with Vietnam's Government effort in divesting state capital from EEMC.
According to Hyosung Vietnam, demand for power supply in Vietnam is expected to grow steadily, taking into consideration the development of industry sector and an increase in national income level.
To meet the growing demand, EVN would need a company capable of producing power transformer at international standard. On this regard, Hyosung can take EEMC into a global company, in turn to produce 500kV-power transformer.
"As such, we propose to purchase through the Unlisted Public Company Market (UpCOM) for the entire 13.13 million shares of EEMC under EVN ownership at price of VND90,000 (US$3.93) per share," said in Hyosung's letter.
By the closing session on May 18, each EEMC share was changed hand at VND68,500 (US$3) per share, indicating that Hyosung is willing to pay at price 31% higher than the current market price.
Vietnam is one the fastest growing electricity markets in Southeast Asia, with an average growth demand in the next 3 years expected at 10%.
In February, Hyosung Group Chairman Cho Huyn-jun revealed plan to expand investment in the chemical and heavy industry sectors in Vietnam.
Last year, Hyosung has invested a total of US$1.3 billion in Ba Ria Vung Tau Province in the southern part of Vietnam for a polypropylene plant, a dehydration (DH) facility for the plant, and a liquified petroleum gas (LPG) storage tank.
Vietnam is fast becoming a popular destination for direct investment by multinationals due to its free trade agreements with various countries. The nation also boasts cheap labor costs and a location optimal for Chinese and Thai supply chains.
South Korea was the biggest direct investor in Vietnam between 2014 and 2016. Samsung Electronics runs two factories in the country, which are responsible for 30% of the group's global smartphone production. Samsung also plans to ramp up the production of televisions, refrigerators, and other household appliances in Vietnam. LG Group and other South Korean concerns are actively investing in the country as well.
