ITL Corp: Spending trillion on acquiring logistics segment of Gelex and just received a loan of USD 70 million from IFC

IFC, a member of the World Bank Group, recently announced that it would provide a $ 70 million loan to Vietnam's In Do Tran Logistics and Shipping Joint Stock Corpoation (ITL Corp). This loan will help ITL Corp, one of the leading domestic logistics companies in Vietnam, transform and grow through asset additions, new warehouse and facilities development, and deployment advanced information technology systems.

Furthermore, this investment will enable ITL Corp to provide customers with more integrated and higher quality logistics services, including domestic manufacturers and SMEs.

"IFC's long-term funding package and international expertise, especially in the current pandemic context, are very valuable support that will surely help us improve the efficiency of our existing logistics system and expanding ITL Corp's network and business portfolio to better serve customers”, said Mr. Ben Anh, General Manager of ITL Corp.

In addition, IFC will also help the company improve environmental, social and corporate governance standards for sustainable development.

High logistics costs increase general business costs and negatively affect Vietnam's competitiveness both globally and domestically. Therefore, in the context of the world economic fluctuations due to the COVID-19 pandemic, IFC still decided to invest in Vietnam's logistics supply chain in order to enhance the efficiency and competitiveness of its commercial operations. trade.

ITL Corp: Exclusive distributor for Thai Corp, Unilever

ITL Corp is the largest airline and GSA service provider in Vietnam and a leader in aviation market capabilities with a 20-year history of development. ITL is the representative of more than 22 airlines such as Thai Airways, Qatar Airways, AirBridge Cargo, Jestar Airlines, Ana Cargo, AirFrance, Delta Air Lines, Vietnam Airlines...; operate cargo for more than 300 flights per week, with a capacity of more than 150,000 tons of cargo per year.

Currently, ITL is the leading expert in providing integrated logistics solutions for air transport, international transportation, general logistics, railway services, customs and distribution services in Indochina, logistics e-commerce, express delivery, warehouse services with international standard systems spanning across Vietnam and covering an area of ​​more than 300,000 square meters.

ITL's network of operations in Vietnam and regional markets: Laos, Cambodia, Myanmar, Thailand, Singapore, ... with more than 70 offices and more than 1,900 highly specialized staff ready to serve all needs of the business.

In addition to its intrinsic potentials, ITL also brings added value to customers when the joint venture operates in Vietnam with the world logistics "giants" such as: Mitsubishi Logistics, CEVA Logistics, Keppel Logistics, UPS Supply Chain...

In June 2019, ITL operated the ITL-ICD Tan Cang Song Than Logistics Complex in Binh Duong with a scale of more than 50,000m2, the largest in Southeast Asia, making a significant contribution to the domestic supply chain and area. This project is the result of a strategic handshake between ITL and ICD Tan Cang Song Than (a member of SNP).

In the logistics segment, ITL currently exclusively distributes FMCG products of two major partners, Thai Corp International (Vietnam) and Unilever Vietnam. The main consumer goods of Thai Corp such as Red Bull energy drink, three-girl canned fish, Cellox and Zilk paper towels, ... will be distributed by ITL's truck fleet with a tonnage of 1 ton - 15 tons. Unilever has more than 400 brands, among the most famous products are OMO, Surf, Lux, Dove, Knorr, Comfort, Vaseline, Pond's, P / S, Close Up, AXE, Rexona, Vim, Cif, Sunsilk, Sunlight, ...

Financial data shows that as of December 31, 2019, ITL's total assets reached more than VND 2,400 billion. This company just increased its capital from VND 698 billion to VND 794 billion.

Mr. Tran Tuan Anh - Chairman of ITL Corp

Chairman of the Board of Directors is Mr. Tran Tuan Anh, who holds about 48% of the company, including shares owned by Sea Investment Corporation owned by Mr. Tuan Anh. Last year, Symphony Logistics PTE LTD spent $ 42.6 million buying a 25.12% stake in ITL from the Singapore Post. Three individuals holding shares of ITL are Ms. Nguyen Thi Nhu Mai, holding 4.65% and two other foreign shareholders holding more than 10% of the shares of ITL Corp are Mr. Veera Satchatippavarn (Thai nationality), one of the founders of the Company and Mr. Zulkifli Bin Baharudin - leader of the Singapore Post.

Last year, ITL converted a loan from Templeton Strategic Emerging Markets Fund IV, LDC, to equity by issuing 9,580,869 shares to Templeton, holding about 12% of the new capital.

Regarding the business situation, in 2019, ITL's total revenue reached VND 3,728 billion, an increase of more than 24% compared to the previous year, of which, more than 60% of revenue came from air transportation. The company's pre-tax profit was 259 billion in 2019, up 24% the previous year, profit after tax reached 210 billion, up 13.5%.

ITL Corp acquired the entire logistics segment of Gelex

In July 2020, a document from the Southern Logistics Joint Stock Company (Sotrans code STG) agreed to allow ITL Corp to be offered to buy 100% of its shares publicly. Then ITL Corp registered to buy 57,199,090 STG shares on the floor, of which there were 53,819,980 shares, equivalent to 54.78% of STG's shares owned by Gelex Logistics Company Limited, the company 100% capital of Vietnam Electrical Equipment Corporation (code GEX).

ITL Corp's decision to increase its ownership to 100% Sotrans means that ITL will buy back Gelex Logistics' stake in Sotrans. However, in the report dated July 16, 2020, ITL Corp said that it has not bought any STG shares out of a total of nearly 57.2 million registered shares because ITL Corp has signed a contract with Gelex to buy back 100 % shares in Gelex Logistics, but the transfer of ownership has not been completed. This means that Gelex has "let go" of logistics for ITL.

In another corner, in the latest document dated July 30, 2020, Gelex Logistics changed its name to North Start Logistics Co., Ltd. with the legal representative, Mr. Dang Doan Kien, the owner of the business also changed from Vietnam Electrical Equipment Corporation to another legal entity. Mr. Dang Doan Kien is currently the Vice President of ITL in charge of investment, so this deal can be said to have reached the final stage.

Gelex Logistics has a charter capital of VND 1,210 billion, owns 54.8% stake in Sotrans and 2 logistics centers of 80 hectares. Meanwhile, Sotrans holds many other entities such as 84.4% capital of Southern River Corporation (Sowatco, UPCoM: SWC), 84% Vietranstimex (UPCoM: VTX) - the No. 1 unit in Southeast Asia in transport. over-weight cargo, 51% owned by Southern Port, 86.2% by Construction Construction (ECCO) ...

According to Dang Doan Kien, ITL's mobilization of USD 70 million from IFC will significantly improve ITL's asset system, allowing the Group to own a system of seaports, river ports, inland barge systems. , ICD, warehouse and allow ITL to start a dual-brand strategy as quickly as possible because it already owns strong brands and operating systems that have been built since the 70s.

Currently, in the Logistics industry, there are about 3,000 to 5,000 small and very small domestic enterprises, so the consolidation trend (consolidation, M&A) of companies in the industry will take place very strongly. Through M&A, ITL will improve the asset foundation, key ports, logistics positions ... to maintain its leading position in the Logistics chain, compete with major logistics companies in the world.

Phaata (Adapted from Tri Thuc Tre)