Property company the VTrust Group is providing a new service of business evaluations in Cambodia. This new service will help investors and business owners with the sale and purchase of businesses so that everyone benefits.
This new service will not only improve the business environment, but it is hoped will also attract more investors to come to Cambodia.
To find about out the new service, Siv Meng talked to Chit Uys Stevexo, the executive director of VTrust Group.
Why is VTrust Group launching this service?
VTrust Group is launching this service based on a number of factors: VTrust Group sees much potential when Cambodia becomes economically integrated into ASEAN. Then, there will be more investors coming to Cambodia, and we see that Cambodia is starting to strengthen taxation, so all companies need to evaluate themselves so that it is easy to audit.
What benefits will it provide to customers?
Cambodia’s political and economic stability will attract more foreign investors to Cambodia. If foreigners come to invest in any country, most of them do not start new businesses, so they partner with any company they buy or contribute shares to domestic companies. So when they want to buy the company, they need the evaluation before they make a decision. Then, they will seek an evaluation company to help and facilitate their decision-making about what price they should buy. In addition, when a seller wants to sell any part or all of their company, they also need our service to decide what price they should sell within the current market context.
Therefore we will provide this service for those who want to sell or those who want to buy a business. They all can discuss it with us. We can discuss with them about documents they have and what price they want to sell; that is, they can engage us to do the evaluation of their business. With this, we will receive a lot of benefits:
If they sell, they will not incur any loss and they will receive the price they deserve, but businessmen in Cambodia currently do not understand this issue.
This service is new to Cambodia. How do you plan to make entrepreneurs understand this issue?
It is a new service in Cambodia, but it is not for international companies. Most businessmen or entrepreneurs in Cambodia seem not to understand the importance of business evaluation, because many companies which want to sell their businesses do not get any consultation on this issue. I can provide the consultation without charge, and when they use our service, they can sell at 50 to 100 per cent over their sale price. This service is new to Cambodia, so if we advertise it widely, those who want to sell their business will not incur loss.
What is the fee for customers?
We charge customers at lower rate than the broker who charge 3 per cent. We charge only 1 per cent.
Does VTrust Group have experts to do this job?
VTrust Group hires foreign experts to do this job, and we also have local experts who have been trained by an agency of the Netherlands’ government. In addition, VTrust Group is also a member of the American Evaluation Association, from which we receive a lot of information, and we always pay the membership dues every year. VTrust Group is also a member of the ASEAN Evaluator Association.
Does VTrust have experience in providing this service to big companies in the country?
We have much experience in this work because we provided the evaluation for Phnom Penh Water Authority, which is listed on the stock exchange, for Preah Sihanouk Port, for Telecom Cambodia, which are prepared to be listed in the near future, for Rural Development Bank and two other private companies which are preparing to be listed on the stock exchange.
What kind of evaluation are accepted by investors and entrepreneurs? What are the indications that the evaluation is correct?
The business evaluation relies on three main principles:
The evaluation is comparative. For example, the company is in operation or not? The price of the company? So we compare the size, and then we will find the price.
Another point is that we evaluate the income potential of the company. How much the company can earn?
Another technique is the evaluation of net assets. So the evaluation will look at the company’s potentials such as land, building, and the business. How much they can sell and buy it according to the actual situation?