A wood production line at Truong Thanh Furniture Corporation. The company's shares could be delisted on HCM Stock Exchange. (Photo: VNA)HCM City (VNA) -The Ho Chi Minh Stock Exchange has warned that shares of Truong Thanh FurnitureCorporation (HOSE: TTF) could be delisted as its accumulated losses might haveexceeded the company’s charter capital.
According to the company’srevised first-half financial report, Truong Thanh Furniture recorded negative 1.46trillion VND (64.9 million USD) in the undistributed post-tax profit as of June30, equal to 98 percent of the company’s charter capital.
The report was released in lateAugust after the State Securities Mission rejected the company’s request toextend the deadline for financial report submission to September.
According to auditors Ernst &Young, the amount of 84.6 billion VND in loan interest included by the companyin its financial report as income was ineligible under current regulations.
Truong Thanh Furniture said in anote to the State Securities Commission and the HCM Stock Exchange in lateAugust that the loan interest was erased by its creditors as they found thefirm’s business plan was possible to achieve.
The lenders were Viet A CommercialJoint Stock Bank, Kien Long Commercial Joint Stock Bank and Sai Gon-HanoiCommercial Joint Stock Bank.
If Truong Thanh Furniture hadfailed to record that amount of money as its income in the financial report,the company would have suffered a net loss of 83 billion VND for the first sixmonths of 2017, raising its undistributed post-tax profit to negative 1.5trillion VND.
The potential amount ofundistributed post-tax profit could exceed the firm’s charter capital by 55billion VND.
The HCM Stock Exchange said inits statement last week that the company’s share could be delisted from thestock market in accordance with the Article 60, Decree 58/2012/ND-CP issued bythe Government on July 20, 2012.
The article states that acompany’s shares will be delisted if that company suffers losses for threeconsecutive years or its accumulated loss exceeds its charter capital,according to the firm’s latest financial report.
In order to avoid being delisted,the company has to either reduce its accumulated loss, which was reported inthe six-month financial report, or increase its charter capital.
At the end of May, the companyannounced it would increase its charter capital in the second half of 2017 torestructure the firm’s financial system and provide an increase in its workingcapital, improving the company’s performance.
The company planned to issueabout 100 million shares in the third quarter of this year in an attempt tocollect at least 1 trillion VND.
The share issuance plan wassubmitted to the company’s shareholders in mid-June 2017, but no decision hasbeen made up to now.
Shares of Truong Thanh Furniture,listed on the HCM Stock Exchange as TTF, fell 3.6 percent on September 18 toclose at 8,000 VND per share. The company’s shares have fallen about 81 percentfrom its all-time high of 43,600 VND per share hit on July 18, 2016.
The sharp fall of Truong ThanhFurniture’s shares came after the firm in mid-2016 failed to sell a part of itscapital to Tan Lien Phat Construction Investment Company, a member of propertydeveloper Vingroup.-VNA
VNA
