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Vietnam Airlines makes plans for September IPO

Update: April, 04/2014 - 09:51

Vietnam Airlines' IPO will be the first aviation equitisation in the Southeast Asian country that makes the value determination process more challenging. —  File Photo
HA NOI — The State-owned flag carrier plans to launch its initial public offering (IPO) in September, stated Deputy Minister of Transport Nguyen Hong Truong during the ministry's Q1 meeting.

The long-haul IPO, which was initially scheduled to take place by the end of the second quarter, is being viewed as urgent, since industry competition is intensifying and private carriers are vying for Vietnam Airlines' passengers.

Vietnam Airlines has valued itself on the basis of two methods and submitted the two proposals to the Ministry of Transport and currently awaits approval of Prime Minister Nguyen Tan Dung.

On one hand, based on its book value, Vietnam Airlines' was valued at VND57.156 trillion (US$2.78 billion), of which the State capital accounted for VND10.567 trillion (US$507 million), as of 31 March, 2013.

However, based on international standards, foreign financial advisers have estimated that Vietnam Airlines' value was worth VND57.047 trillion (US$2.7 billion), of which the State capital contributed VND23.493 trillion (US$1.128 billion), as of 31 March, 2013.

Vietnam Airlines' IPO will be the first aviation equitisation in the Southeast Asian country that makes the value determination process more challenging.

In the monthly government meeting held earlier this week, Minister of Transport Dinh La Thang requested the Prime Minister to hasten the process of ratifying Vietnam Airlines' proposal, so that the carrier can finalise its detailed IPO plan.

The carrier plans that after launching its IPO, the State will hold a ruling stake of 70-80 per cent, also pending the Prime Minister's approval.

Vietnam Airlines, an official member of SkyTeam Alliance since June 10, 2010, is the only one left among the six regional main flag carriers that is not publicly listed. In Viet Nam, IPO and listing are separate processes.

Vietnam Airlines earned a pre-tax profit of VND533 billion ($25.3 million) in 2013, 34 per cent more than the year's set target. The carrier earned a total revenue of VND72.6 trillion ($3.4 billion), up 8.5 per cent as compared to the year's plan. The airline carried 15 million passengers, with an occupancy ratio of 79.5 per cent, setting a record. — VNS

Vietnam Airlines fleet summary

Aircraft

In service

In Storage

On Order

Total

83

2

35

Airbus A320-200

3

0

0

Airbus A321-200

50

0

5

Airbus A330-200

9

0

0

Airbus A350-900XWB

0

0

14

ATR 72-212A(72-500)

12

0

0

Boeing 777-200ER

9

0

0

Boeing 787-9

0

0

16

Fokker F-28-0070

0

2

0

Source: CAPA Fleet Database as of 1st April, 2014, achieved at http://centreforaviation.com/

Note: *Firm orders include those placed directly by the operator and by lessors assigned to the operator.


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