Ca Mau Province, Vietnam-based seafood company Cadovimex is aiming to finalize bankruptcy proceedings later this year due to heavy losses.
In a resolution approved at its annual stakeholders meeting in early October 2022, Cadovimex said it is also looking for new investors to help restructure the company, which will be done in parallel with the bankruptcy procedures.
Cadovimex is an exporter of shrimp, pangasius, squid, and octopus, but suffered in the 2008 financial crisis. A long-term capital misappropriation of VND 175 billion (USD 7.2 million, EUR 7.4 million), which the company never recovered, hampered its operations, according to the Vietnam Post. The company was forced to rely on loans to offset the loss of capital stemming from the 2008 financial crisis, but increased interest rates and the resulting debt ultimately caused the company to lose money, it found.
In 2009, the company’s shares were listed on the Ho Chi Minh Stock Exchange, but its shares were delisted in June 2012 following three consecutive years of losses. Cadovimex’s shares are now traded Vietnam’s Unlisted Public Company Market, with a price of VND 1,300 (USD 0.053, EUR 0.054) per share as of 14 October, down nearly three times from its 2022 peak of VND 3,600 (USD 0.148, EUR 0.151) per share in February, and down significantly from the VND 20,000 (USD 0.82, EUR 0.84) its shares traded at in 2009.
Due to its mounting losses, local banks suspended all lending to the company in 2015, forcing it to stop its main production activities. Most of the company’s manufacturing equipment is in need of repair, but the company can’t secure the funding it needs to fix it, the Vietnam Post reported.
To continue operations, Cadovimex has relied on leasing of its storage facilities and conducting outsourcing services for other seafood companies. Its losses between 2016 and 2021 were VND 1.355 trillion (USD 55.6 million, EUR 56.9 million), rising to VND 1.44 trillion (USD 59.1 million, EUR 60 million) as of 30 June, 2022.
Earlier this year, local courts opened bankruptcy proceedings for two other seafood companies in Vietnam, the Ho Chi Minh City-based Seaprodex Sai Gon (due to loss of payment capacity), and Soc Trang Province-based Phuong Nam Seafood (due to its inability to pay debts).
Photo courtesy of Cadovimex
