Viet Nam News
HÀ NỘI — Three big companies of the Việt Nam National Oil and Gas Group (PetroVietnam) will make their initial public offerings (IPOs) in the next three months, under equitisation plans approved by Deputy Prime Minister Vương Đình Huệ late last week.
The three companies are: Bình Sơn Refining and Petrochemical Company (BSR); PetroVietnam Power Corporation (PV Power); and PetroVietnam Oil Corporation (PVOil), valued at US$2 billion, $1.5 billion and $610 million, respectively.
The IPOs will pump 916,403 million shares into the market, offering a massive opportunity for investors interested in oil and gas stocks at a time global oil prices are recovering.
Oil prices have recovered from the bottom price of $27.58 per barrel on January 18, 2016 to around $50 per barrel at presenty.
From the beginning of this year, many oil and gas stocks have seen increases of 20-50 per cent, including the PetroVietnam Gas Joint Stock Corporation (GAS), PetroVietnam Transportation Corporation (PVT), PetroVietnam Drilling (PVD) and PetroVietnam Fertiliser and Chemicals Corporation (PVC).
According to Phan Dũng Khánh of Maybank KimEng Securities, the medium-term development outlook for oil and gas stocks is positive.
The three companies, BSR, PV Power and PV Oil, are in good shape, according to their financial reports.
Under the approved equitisation plan, BSR, which manages and operates Dung Quất Oil, has a charter capital of VNĐ31 trillion (US$1.36 billion), and is the largest firm everto IPO ever. The face value of its share is VNĐ10,000.
Nearly 242 million shares, or 7.79 per cent of its charter capital, would be sold to the public at an initial price of VNĐ14,600 per share. At this price, BSR would have value of $2 billion.
PetroVietnam would hold 43 per cent of BSR’s charter capital while selling 49 per cent to strategic investors and 0.21 per cent sold BSR’s employees.
Strategic investors in BSR must have a minimum charter capital of VNĐ10 trillion and be profitable during the most recent years with no aggregated loss.
Priority will be to investors with experience in operating refineries and oil distribution to support BSR’s oil refinery plant after its privatisation.
According to its most recent financial report, BSR earned revenues of VNĐ38.6 trillion in the first half of this year, rising by 15.4 per cent over the same period last year. After-tax profit jumped 266 per cent to VNĐ3.8 trillion in the period.
PV Power is the second largest power supplier in Việt Nam after national utility Electricity of Viet Nam (EVN), with a market share of around 12 per cent. It is also among the most profitable companies of PetroVietnam. The company has a charter capital of VNĐ23.4 trillion.
It will put up about 469 million shares, or 20 per cent of the charter capital, for the IPO at an initial price of VNĐ1.48 billion.
PetroVietnam would hold a 51 per cent stake in PV Power after its equitisation, but this will be reduced to below 50 per cent from 2019, depending on the company’s debt restructuring process.
It is planned that around 676 million shares, or nearly 29 per cent of its charter capital, would be sold to strategic investors.
Founded in 2007 as a wholly-owned PetroVietnam subsidiary, PV Power now operates eight power plants, including four thermal power plants.
Its net revenue is estimated to reach VNĐ31.5 trillion in 2017, a year-on-year increase of 12 per cent, for after-tax profits of VNĐ1.9 trillion, up 25 per cent over last year, according to the HCM City Securities Corporation.
Nguyễn Xuân Hòa, general director of PV Power, said that the company plans to contribute 20 per cent of the nation’s total electricity output in the next decade.
At PVOil, the State’s stake would be cut to 35.1 per cent after equitisation.
The company has a charter capital of VNĐ10.3 trillion, 20 per cent of which will be offered to the public at an auction held on the HCM City Stock Exchange in January, 2018, at an initial price of VNĐ13,400 per share.
More than 462 million shares, or 44.72 per cent of its charter capital, will be sold to strategic investors.
Foreign ownership of PVOil is capped at 49 per cent of its charter capital.
About 1.8 million shares, or 0.18 per cent of its charter capital, will be be sold to its employees.
PVOil is now the second largest petrol distributor in Việt Nam after Petrolimex, with a market share of 22 per cent.
Last year, the company reported revenues of VNĐ34 trillion and before-tax profits of VNĐ530 billion.
This year, its revenue was expected to reach VNĐ55.5 trillion with before-tax profits of VNĐ520 billion, both exceeding annual targets. — VNS