Vietnam’s leading confectioner Kinh Do Corp. (KDC) expects to deliver a private placement of 20 million shares to Deutsche Bank Trust Company Americas as an indirect way to list on the London Stock Exchange, said the CEO of the local firm.

Tran Le Nguyen told reporters at the company’s general meeting late last week in HCMC that the company would issue 20 million shares to the foreign partner at a total value of VND200 billion. The Deutsche Bank will issue global depository receipts (GDRs) of Kinh Do Group that will be traded on the London Stock Exchange.

GDRs are negotiable certificates held in the bank of one country representing a specific number of shares of a stock traded on an exchange of another country.

Nguyen said his company and Deutsche Bank recently had signed an agreement to this effect.

After its shareholders’ approval, the company will ask the State Securities Commission of Vietnam (SSI) for permission to issue the new shares.

At the company’s general meeting, shareholders of the company also approved this issuance plan. The price of the new shares will be the average of 20 sessions before the date of issue, but not lower than the book value of KDC in the latest audit, Nguyen said.

The new mobilized fund will be used to invest in the company’s manufacturing expansion projects like cooking processing, and ice cream and dairy product manufacturing.

The CEO said his company this year would install two more production lines for its Kido’s ice cream factory in Tay Bac Cu Chi industrial park in HCMC to meet increasing demand on the market. Besides, it will also expand its food processing factory in Binh Duong Province.

He said this share issue, if successful, would be a preparatory step for the company to trade its common shares on international financial markets later. This will help to promote its brand name on the local and international market.

This share issue, when completed, will make Kinh Do the second Vietnamese company to list on London Stock Exchange after Hoang Anh Gia Lai Joint Stock Company, which listed its global depository receipts worth US$56.5 million on the London Stock Exchange on March 24 this year.

Kinh Do Corporation (KDC) last year successfully merged with its offshoots North Kinh Do (NKD) and Ki Do Joint Stock Co., or Kido’s. After the merger, Kido’s and NKD have become KDC’s subsidiaries and operate as one-member limited liability companies.

As of the end of last year, KDC had total equity of nearly VND3.74 trillion and total assets of VND5.04 trillion. Kinh Do Corp. expects pre-tax profit of VND500 billion this year, up from the VND420 billion recorded in 2010.

Sales this year may increase to VND4.2 trillion compared to last year’s VND3.3 trillion, according to a statement of the company. It is looking to pay 2011 dividends at 24% in cash.

Source: SGT