Lam Dong tea sells shares

The Lam Dong Tea Joint Stock Co will become the nation’s first tea enterprise to make an initial public offering on the HCM City bourse on June 4.

The company will issue more than 1.9 million shares, representing about 43% of the company’s equity of VND45 billion (US$2.8 million).

Following the IPO, the State would continue to hold a 45% stake in the company, while employees would hold 11.9%.

Several of the company’s subsidiaries were equitised in 2005, including Cau Dat - Da Lat Tea, Di Linh Tea and Coffee, Minh Rong Tea, Ha Giang Tea, Rong Vang Tea and May 1 Tea.

Besides processing green tea, Lam Dong Tea has a black tea processing facility with an annual capacity of up to 1,200 tonnes.

Lam Dong, formed in 1976, annually exports about 1,200 tonnes, or 15-20% of its total output of green and black tea, to the Middle East, and 1,200-1,700 tonnes, or 20-28% of total output, to Asian countries.

It predicts revenue of VND57.4 billion (US$3.59 million) in 2007, VND66.3 billion in 2008 and VND75 billion in 2009, and pre-tax profits of VND1.5 billion ($94,370) in 2007, VND3 billion in 2008 and VND4.2 billion in 2009.

Plans for 2007-09 include investment in renewing equipment and technology, diversifying products, improving quality and expanding markets.

Source: VNS