Fecon raises foreign ownership limit to 75 percent

Foundation Engineering and Underground Construction JSC (FECON), a leading contractor in foundations and underground work in Vietnam, raised the foreign ownership limit (FOL) to 75 per cent as the premise for its plan to raise chartered capital in the coming period.



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State Security Commission of Vietnam (SSC) received all the necessary documents and recently approved Fecon’s new FOL as 75 per cent.

Fecon’s leaders said that the new FOL will benefit the company and its shareholders in the long term. Fecon believes that thanks to the larger FOL, they can raise stock prices as well as liquidity for transactions, while at the same time raising capital may become easier.

Increasing the FOL can be considered the first step for Fecon to prepare for its plan on raising capital. After the extraordinary shareholder meeting in July 2017, Fecon announced that it plans to raise chartered capital by issuing shares for existing shareholders by exercising call options, holding private placements for strategic shareholders, and implementing the employee stock ownership plan (ESOP).

According to Tran Phuong, representative of Fecon, the company decided to raise its chartered capital to finance its infrastructure businesses, including traffic and energy infrastructure, as well as other underground constructions in accordance with its strategy in the 2017-2020 period.

Fecon made somewhat of a spectacle in Vietnam by continuously publishing attractive projects resulting from its partnership with numerous investors in the fields of construction and energy.

In July 2017, Fecon signed a contract with LG Display Haiphong to become the contractor responsible for nearly all of the foundation construction of LG’s projects in Vietnam. Other smaller infrastructure projects, such as Newtaco, Sunvina, Viettel Halong headquarters, Vi-Energy, and Yen Bai Hotel, will help Fecon generate a revenue of nearly VND50 billion ($2.2 million) in 2017.

One of the more remarkable deals of Fecon was with Japan Expressway International Company Limited (Jexway) and Central Nippon Expressway Company Limited (Nexco). In the first phase of the cooperation, Nexco and Jexway will purchase 20 per cent of Fecon’s stakes in the Phu Ly bypass project, which was kicked off in 2014, completed in 2016, and officially put into operation collecting tolls at the South Gie Bridge toll booth on November 24, 2016.

For the next phase, Fecon, Nexco, and Jexway will consider cooperation in new build-operate-transfer (BOT) projects in 2017 and early 2018.

Besides, Fecon gets involved in several traffic infrastructure projects, such as the project on urban railway Ho Chi Minh City Line 1 Ben Thanh-Suoi Tien, and railway stations project in the route of Kim Ma-Cat Linh-Quoc Tu Giam-Tran Hung Dao. Also, Fecon was short-listed for the Japanese joint venture Huyndai-Ghella for the underground route Thu Le-Cat Linh of Metro line 3-Hanoi project.  

In the field of energy, Fecon signed a strategic agreement with ACWA Power, a giant in the energy industry from the Kingdom of Saudi Arabia. Fecon plans to invest in the infrastructure of ACWA Power’s solar energy projects in Vietnam.

The first project is expected to be located in Binh Thuan province. The final investment decision is hoped to be made in the last months of 2017, so that the project will be implemented soon so that it can be launched in early 2019 as scheduled.

With all these projects, it can be seen that raising capital is an inevitable step for Fecon to expand business in the long-term. 

VIR

Fecon raises foreign ownership limit to 75 percent, vietnam economy, business news, vn news, vietnamnet bridge, english news, Vietnam news, news Vietnam, vietnamnet news, vn news, Vietnam net news, Vietnam latest news, Vietnam breaking news
 
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