The construction of the Thac Ba 2 Hydropower Plant in northern Vietnam was delayed last year due to late payments from Song Da 6 HSC, the main contractor, to its subcontractor, the Truong Phuc Loc Engineering JSC. Song Da 6 is among the 23 subsidiaries that will face divestment from its parent company, the Song Da Corporation JSC. — VNA/VNS Photo

 

The State-owned Song Da Corporation Joint Stock Company on Tuesday announced plans to divest from 23 subsidiaries and dissolve one unit, as part of its restructuring strategy through to 2028.

 

The corporation said they will focus on two main areas, which are construction and installation, along with the production and trading of commercial electricity.

 

They plan to divest entirely from the 23 subsidiaries that are “non-performing, not aligned with the company’s development strategy, with low competitiveness” to enhance their capital efficiency, restructure debts, and improve financial indicators.

 

They also plan to dissolve the National Road No. 2 BOT JSC.

 

The subsidiaries that will face divestment include the Song Da 2, Song Da 4, Song Da 6, Song Da 11 and Song Da 12 joint stock companies.

 

However, for Song Da 4 and 6, their performance will be reviewed, and they may be removed from the divestment list, if showing stability and effectiveness, according to the corporation.

 

The Song Da Corporation was founded in 1961 under the Ministry of Construction and is the main contractor for most hydroelectric projects in Vietnam.

 

As of June 30, it had 3,220 employees and manages 29 subsidiaries and joint ventures.

 

Investors have noted that despite having total assets of VNĐ22.77 trillion (US$912.9 million) as of June 30, the corporation’s efficiency of asset utilisation is low.

 

In 2023, its return on assets (ROA) was only 1.86 per cent, while the industry average was 2.24 per cent.

 

The ROA is predicted to be also below industry average this year as the company’s profits for the first half of the year was only VNĐ176.8 billion ($7.09 million), down 42.1 per cent compared to the same period last year. — VNS

 

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