Vietnam Airlines earns US$35 million after divesting from Cambodia Angkor Air
Vietnam Airlines JSC (HoSE: HVN) recently announced that it has completed the transfer of 35% of its shares in Cambodia Angkor Air (K6) to the receiver, under an agreement between the two parties in the share transfer contract.
After the transfer, K6 is no longer an affiliated company of the flag carrier.
According to a 2021 audited consolidated financial statement, on January 3 and March 29, the airline received US$30 million and US$4 million respectively from investors to buy back the contributed capital of the company at K6.
It had also received a deposit of US$1 million in 2019. The total US$35 million corresponds to 35% of K6 shares.
Although the money was only paid until 2022, due to the transfer of stock ownership in 2021, Vietnam Airlines’ report has no longer recorded K6 as an associate, and revenue from financial activities posted a gain of more than VND647.7 billion from the profit of the transfer of contributed capital.
The income has helped the carrier reduce its loss in 2021 and its equity is still greater than zero, escaping a delisting sentence.
Cambodia Angkor Air was established in 2009 under the cooperation of Vietnam Airlines and the Royal Government of Cambodia.
Under the joint venture contract, Vietnam Airlines contributed 49% of the capital to Cambodia Angkor Air with the historical price of VND868.5 billion.
At the end of 2021, after divesting 35% of shares, the remaining 14% of K6 shares were transferred to the investment portfolio to contribute capital to other entities with the historical price of VND248 billion.
Last year, K6 business activities were heavily affected by the COVID-19 pandemic, like other airlines in the region and the world.
To minimise losses, K6 has implemented solutions to restructure, reduce the scale of operations, maintaining only a few main routes with minimal frequency to cut costs, negotiating to delay payments, and taking advantage of every opportunity to increase the exploitation of charter and cargo flights to supplement cash flow to maintain operations.
However, it had lost US$17.7 million last year, an increase of 37.2% compared to 2020’s losses.
On the stock market, HVN fell 1.04% to trade at VND18,950 per share at 10:55 (local time) after gaining for four straight sessions.