Tuesday, October 25 2016


Viet Nam's IPOs underwhelm this year

Update: December, 25/2015 - 08:45

Vinalines' Tay Son 1 ship. The shipping company failed to launch its IPO this year. — VNA/VNS Photo Bui Tuong

HA NOI (VNS) — Viet Nam's initial public offering (IPO) activity has been less than exciting in 2015 and that has been attributed to the lack of blockbuster deals.

A wave of State-owned giants offered their shares to the public in deals worth over VND1 trillion (US$44.4 million) each last year. These included the national flag carrier Vietnam Airlines, the Viet Nam National Textile and Garment Group (Vinatex) and Ca Mau Fertiliser, a subsidiary of energy giant PetroVietnam.

2015 is drawing to a close soon, but so far, only the IPO from the Airports Corporation of Vietnam on December 10 collected VND1.1 trillion ($49 million). Several most-anticipated share offerings have missed the deadline this year.

The holdup in the equitisation of the mobile network operator MobiFone has disappointed investors.

As planned, MobiFone should have announced its value assessment by the third quarter and implemented the IPO in the last quarter of this year. But to date, such information has not been declared, except the news that it has selected brokerage firm Ban Viet Securities as a consultant for its equitisation.

Last month, Minister of Information and Communications Nguyen Bac Son asked the company to submit reports on the equitisation progress weekly to the Corporate Management Department and monthly to ministry officials for effective implementation.

Son said a number of international telecommunications firms from Australia, France, Malaysia and Singapore have expressed interest in a strategic partnership with the company in the past months but gave no further details.

According to the ministry, MobiFone currently has a charter capital of VND15.3 trillion, or $680 million. In 2014, HCM City Securities Company valued MobiFone at $3.4 billion, which may reach beyond $4 billion after the IPO.

MobiFone Chairman Le Nam Tra said that in the first 10 months of this year the company's profit has nearly reached the annual target while its turnover has grown by 7.8 per cent year-on-year. It planned to earn VND36.4 trillion ($1.6 billion) in total revenue and VND7.3 trillion ($324.4 million) in profit in 2015.

Another State-owned enterprise, which failed to launch its IPO this year, is the Viet Nam National Shipping Lines, better known as Vinalines.

In late 2014, CEO Vinalines Le Anh Son confirmed that the shipping company would implement the share offering to the public in the first quarter of 2015. However, after two delays in the second quarter and the third quarter, it has not yet made it even as the year draws to a close.

Son attributed the delay to the lengthy time of settling the company's debts which still stood at more than VND7 trillion ($311 million).

According to the equitisation scheme, Vinalines has a charter capital of VND9.1 trillion ($404 million), of which the State will retain 36 per cent of stakes, strategic investors will hold 30 per cent and the other 33.75 per cent of shares will be sold to the public.

Earlier this year, Viet Nam's budget carrier VietJet Aviation Joint Stock Company also announced its plan of launching the IPO within this year in a deal which could reach $800 million.

The IPO timing had been rescheduled from October to the end of this year, but it might break its promise again.

Vietjet has 30 Airbus A320S and A321S jets on its fleet. In August, the airline's managing director Luu Duc Khanh said the company earned more than VND5.7 trillion ($253 million) in the first six months of this year, a 205 per cent increase year-on-year.

According to Minister of Finance Dinh Tien Dung, about 210 State-owned enterprises will be equitised by the end of this year, which is short of the target of 289.

IPOs with value of over VND1 trillion

1. PetroVietnam Ca Mau Fertiliser Co Ltd

The fertiliser manufacturer launched the initial public offering (IPO) on November 12 with all of nearly 129 million shares sold successfully, collecting VND1.58 trillion (US$70 million) which made it the biggest IPO in 2014.

2. Viet Nam National Textile and Garment Group (Vinatex)

This IPO ranked second in value in 2014 took place on September 22. Though only 90 per cent of offered shares were sold successfully, Vinatex still collected over VND1.2 trillion ($53 million).

3. Vietnam Airlines

Vietnam Airlines sold over 49 million shares to the public on November 14, raising almost VND1.1 trillion ($49 million). Two banks, Vietcombank and Techcombank purchased 48.3 million shares, equivalent to nearly 99 per cent of the offered share number. — VNS

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