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Merger to be discussed at shareholder's meeting: Haraco

HÀ NỘI — Details on a plan to merge the Hanoi Railway Transport JSC (Haraco) and the southern Saigon Railway Transport JSC (Saratrans) will be discussed at Haraco shareholders meeting next week, according to a letter from its board of directors.

"In order to improve the company's business efficiency, details on a plan to merge Haraco and Saratrans will be discussed at Haraco's upcoming shareholder's meeting, set to take place on June  一 五,” the letter stated.

Haraco, Saratrans and the Transportation and Trade JSC - a freight train specialist - form the country's largest railway transport business, the Vietnam Railways (VNR). With Haraco and Saratrans holding a dominant market share on railway passenger transport.

The merging is part of a VNR's effort to restructure its business and investments. VNR aims to recall some of its capital by cutting down its share and maintaining a  五 一 per cent share in the three companies.

Haraco's main transport routes including the Hà Nội - Hải Phòng, Hà Nội - Ðồng Ðăng, Hà Nội - Lào Cai and the North-South. The company began its equitisation in  二0 一 五 with a registered capital of more than VNĐ 八00 billion (US$ 三 四 million). At the time VNR was its largest shareholder with  九 一 per cent. Haraco (HRT) has been registered on UPCoM since  二0 一 六.

Since equitisation - a process to convert a former State-own enterprise into a public company in Việt Nam - Haraco has reported large sales figures but with little to no profit to show for it. For instance, the company reported it net more than VNĐ 二. 五 trillion in  二0 一 九 but only a small profit-after-tax of VNĐ 一 三. 八 billion and a gross loss of VNĐ 七 一 billion.

Last year, the company's sale target was set at more than VNĐ 一. 六 trillion with a projected loss of VNĐ 三 五 五 billion. Haraco has made sizable investments in an effort to renew its fleet with the largest project to-date to build an additional  二00 cars at a cost of over VNĐ 五 五0 billion.

Saratrans held its shareholder's meeting last month but made no note of the merger plans. — VNS