Big boss leaves, Coteccons corporation loses $2.6 billion
Viet Capital Securities (VCSC) has released a report which says Coteccons, the largest construction company in Vietnam, may lose VND60 trillion, or nearly $2.6 billion in 2021-2025.
The battle inside the company has come to an end with the departure of its former president Nguyen Ba Duong, a well known businessman, after 17 years of building the large construction empire. However, the huge fortune is facing problems.
Coteccons' internal conflicts were settled by the departure of former president Nguyen Ba Duong
VCSC estimated that the value of the contracts that Coteccons signed for 2021-2025 is VND15 trillion a year, which is much lower than the VND27 trillion level in 2015-2018.
Coteccons did not announce new contracts in the second and third quarters of the year after a previous VND5 trillion contract.
According to VCSC, the challenges brought by Covid-19 and internal reshuffling will put more pressure on the value of the contracts signed in 2020. The pandemic may lead to the postponement and cancellation of contracts counted in unimplemented contracts.
Prior to that, the battle within the corporation caused the capitalization value to fall by VND10 trillion as Coteccon share price dropped from VND230 trillion per share in late 2017 to VND40,000 in March 2020 before it increased slightly to VND60,000 per share.
The share price recovered in the time from late March to August, following the general trend in the stock market as internal conflicts were settled by the departure of former president Nguyen Ba Duong and other key managers.
However, in the last several months, the share price decreased again, going against the impressive upward trend in the stock market.
Duong resigned from the post of chair of the board of directors on October 2, and Bolat Duisenov took the post on October 5.
Though the long lasting internal battle between the groups of domestic and foreign shareholders in Coteccons has ended, analysts think Coteccons is not likely to repeatedly gain impressive results as it did in the last 17 years under the management of Duong.
The battle reached its climax last June, after the Kusto group of foreign investors and another big foreign shareholder, The 8th Pte Ltd, which held 10.42 percent of Coteccons shares, asked for the dismissal of the managers of the enterprises.
The 8th asked to dismiss Duong from the post of president and legal representative and Nguyen Sy Cong from the post of CEO of Coteccons.
The Vietnamese stock market has been witnessing foreign capital inflow for many years thanks to the country's impressive economic growth and good prospects as Vietnam has opened its economy widely under free trade agreements.
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