|A Vietnam Airline plane lands at Tan Son Nhat International Airport under the ACV. The State-owned enterprise will make its initial public offering on the HCM Stock Exchange on December 10. — VNA/VNS Photo Huy Hung
HA NOI (VNS) — The Ministry of Transport has set criteria for the Airports Corporation of Viet Nam, whose equitisation process is underway, to select strategic investors.
The company, also known as ACV, has about VND22.43 trillion (US$996.89 million) in charter capital and plans to make an initial public offering (IPO) on the HCM Stock Exchange on December 10.
It will offer strategic investors a stake of 20 per cent after the IPO, while the State retains a capital ratio of 75 per cent in the company's equity, and five per cent is offered to its employees and normal investors.
In a decision issued late last month, Minister of Transport Dinh La Thang stipulated the following cases for qualifying strategic investors in the ACV:
- An aviation terminal managing organisation administered at least 10 terminals and airports during 2014, with a minimum revenue of $1.5 billion last year; the turnover from terminal and airport exploitation made up at least 70 per cent of this total revenue; the organisation did not suffer a cumulative loss, with its profit reaching at least 10 per cent of the last year's revenue; and its ownership capital was no less than $2 billion on December 31, 2014.
- A financial institution had an ownership capital of no less than $5 billion on December 31, 2014; the institution did not witness a cumulative loss, and it earned a profit of at least 5 per cent of its revenue the previous year.
- An alliance of either terminal-managing organisations and financial institutions, or non-aviation service providing businesses, comprises three companies maximum. At least one of them manages terminals, administering at least five terminals and airports in 2014, with a minimum revenue of $1 billion last year. The turnover from terminal and airport exploitation accounted for 70 per cent of the total revenue; the firm was not subject to a cumulative loss, and its profit amounted to at least 10 per cent of its revenue last year; and its ownership capital was no less than $1 billion on December 31, 2014. The other units in the alliance had a combined ownership capital of no less than $2 billion last year on December 31, 2014, reporting no cumulative losses.
No strategic investors are to transfer their stakes in the ACV within 10 years, since it is legally certified as a joint stock company. Exceptions are made for special cases adopted by a shareholders' meeting.
After 10 years, the investors can sell their stakes, with purchase priority given to the ACV and other investors given a nod by the Ministry of Transport.
Minister Thang called for strong commitments from any strategic investors to assist the company after it is privatised, in terms of business administration, technology transfer, employee training and financial capacity enhancement.
He appealed to their capital arrangement to build the Long Thanh Terminal, part of the $16 billion Long Thanh International Airport in the southern province of Dong Nai.
The Government designated the ACV to develop the new airport with a projected capacity of 100 million passengers a year in order to ease the pressure on the congested Tan Son Nhat International Airport in HCM City.
While the HCM City airport is expected to reach its full capacity of 25 million passengers a year within the next two years, Long Thanh is set to be the largest airport in Viet Nam when it starts operating by 2020.
Vu Anh Minh, the director of the transport ministry's corporate management department, told the Vietnam News Agency last month that the State's stake in the ACV would be reduced from 75 per cent to 65 per cent "at a suitable time".
The reduction would depend on the Government's calculations in retaining its stake in the company, and the need for capital to assure the progress of the Long Thanh project, he said.
The HCM Stock Exchange announced last month that the ACV will auction 77.80 million shares during its upcoming IPO at an initial price of VND11,800 (52 cents) per share.
According to Minh, the ACV is the largest enterprise in Viet Nam's transport sector, managing 22 international and domestic airports nationwide.
The International Air Transport Association predicted that Viet Nam's aviation industry would grow about 7.3 per cent in terms of passenger traffic between 2014 and 2034 – higher than the world's average growth of 4.6 per cent and the Asia-Pacific's 5.7 per cent.
The domestic industry served 46.6 million passengers during the past nine months, an increase of 22.3 per cent over the same period last year, a recent ACV IPO road show was told. — VNS