KLS to leave securities market after failing to pay dividends

KLS to leave securities market after failing to pay dividends

About  八0 employees will lose their jobs when Kim Long Securities Company, the fourth largest securities firm in Việt Nam, shuts down. — Photo cafef.vn

HÀ NỘI — Kim Long Securities Company (KLS), the fourth largest securities firm in Việt Nam, announced its plan to dissolve and delist from the local market on Sunday.

With a market value of VND 一. 七 trillion (US$ 七 六 million), KLS trails behind Saigon Securities Inc, HCM City Securities Corporation and VNDirect Securities Corporation. While other competitors are trying to expand their businesses to serve the growing market in Việt Nam, KLS decided to leave the sector due to its failure to compete.

The firm, which was established in the capital city in  二00 六, reported revenue of VNĐ 一 七0 billion and profits of minus VNĐ 六 八 billion last year. KLS Chairman Hà Hoài Nam said the firm was unable to pay dividends for  二0 一 六 due to the losses.

Nam said it could not compete with others in such a small-scale market like Việt Nam, which is not suitable for a large number of securities firms to grow at the same time.

For the past several months, KLS shares traded around VND 六,000 to VNĐ 七,000 each, much lower than the book value of VND 一 二, 四 八 九. In addition, with the liquidation of all assets and portfolios, and more than  一 八 二 million KLS shares, shareholders were expected to have VNĐ 一 一,000 per share. Currently, KLS has total assets of more than VNĐ 二 trillion, including VNĐ 一. 六 trillion deposits in the bank.

Nam said that instead of maintaining the firm and bearing more losses, leaving the market to save capital can better benefit shareholders.

Nam told local media that all economic contracts with KLS’s partners and customers are clear and transparent, and closing them would be done without any problem. He said KLS would announce the decision to all owners of the  一0, 八00 accounts currently trading with the firm.

Owners could close their accounts with KLS and switch to other securities firms, or KLS would help transfer their accounts to other potential and prestigious brokers to ensure the best benefit for customers.

Nam said that as one of  八0 securities firms in Việt Nam, the dissolution of KLS would not harm the market. Rather, it would be beneficial for the long-term restructuring of the local market.

If the plan is approved at the general meeting on April  二 五, Nam said the dissolution would take place within six months of the date.

The chairman confirmed that investors of KLS shares would have enough time to trade their shares before it delisted in late August or early September on HNX.

He added that shareholders who were against the dissolution could sell their shares to the firms within  一0 days from the date of meeting at the price listed on HNX.

Currently, KLS had chartered capital of VND 二. 二 trillion and equities of VND 二. 二 七 trillion.

KLS will release all detailed plans in the general shareholders meeting on April  二 五. Its shares rose  一. 一 per cent to close at VMĐ  九, 二00 each on HNX yesterday. — VNS