BSR earns $244 million via IPO

January 18, 2018 - 10:34

The Bình Sơn Refining and Petrochemical Company (BSR), the operator of the Dung Quất Oil Refinery in central Quảng Ngãi province, earned VNĐ5.5 trillion (US$244.5 million) through the sale of nearly 242 million shares during its initial public offering (IPO) held on Wednesday.

Dung Quất Oil Refinery plays an important role in increasing the added value of every tonne of crude oil in Việt Nam. — VNA/VNS Photo Huy Hùng

HÀ NỘI — The Bình Sơn Refining and Petrochemical Company (BSR), the operator of the Dung Quất Oil Refinery in central Quảng Ngãi province, earned VNĐ5.5 trillion (US$244.5 million) through the sale of nearly 242 million shares during its initial public offering (IPO) held yesterday.

The sale, organised on the HCM Stock Exchange, is Việt Nam’s biggest initial public offering (IPO) this year and part of the Government’s drive to privatise state-owned enterprises to improve their performances

The amount of shares were equivalent to 7.79 per cent of BSR’s charter capital, offered at a starting price of VNĐ14,600 per share.

At this price, BSR is valued at $2 billion, making it the largest firm ever to hold an IPO

The auction attracted 4,079 domestic and foreign investors, including 3,964 individuals and 115 organisations, registering to purchase 652 million shares.

The highest bid price was VNĐ35,000 per share, the lowest was VNĐ14,600 per share - and the average was VNĐ23,043, 21.5 per cent higher than the starting price.

Sixty-two organisations and 561 individuals won the bids.

BSR is a wholly-owned subsidiary of Việt Nam National Oil and Gas Group (PetroVietnam) and operator of the $3 billion Dung Quất Oil Refinery, the first oil refinery in the country. The company’s charter capital is VNĐ31 trillion.

PetroVietnam will retain 43 per cent of BSR’s charter capital, while a maximum of 49 per cent will be sold to strategic investors in three months after the IPO. About 0.21 per cent of shares will be offered to the company’s employees.

Foreign investors may own up to 49 per cent of charter capital.

“The company has recently worked with 17 local and international investment funds and five strategic partners,” Trần Ngọc Nguyên, CEO of BSR, told a roadshow held late last year to introduce investment opportunities.

“They include major investors, such as the Repsol Group from Spain, two major oil and gas corporations from the United States, Macron Petroleum from South Africa, and an investor from Brunei. During the last year, many potential foreign investors have come to explore investment opportunities in BSR.”

The Repsol Group wishes to not only own shares in BSR, but also participate deeply in the management, operations, and crude oil trading of Dung Quất.

According to the company’s financial statement for the end of September, BSR has more than $120 million deposited with OceanBank, which has temporarily ceasing trading. This and other losses are a source of some concern for many investors.

Major oil and gas corporations such as Russia’s Rosneft, South Korea’s SK Group, Thailand’s PTT, and the Kuwait National Oil Corporation have all expressed an interest in buying BSR shares.

The Petrolimex Group also wants to become a strategic partner through share purchases and will prioritise consumption of petroleum products from Dung Quất.

After nearly nine years of operations, since February 2009, the Dung Quất Oil Refinery has produced and sold nearly 50 million tonnes of different products, earning revenue of about $38 billion and contributing nearly $7 billion to the State budget.

BSR accounted for 16 per cent of PetroVietnam’s total revenue and 10 per cent of its State budget contributions last year. It also contributed 33 per cent of its total profit.

PV Power IPO

PetroVietnam Power Corporation (PV Power) will offer 20 per cent of its shares in an initial public offering (IPO) on January 31.

PV Power is a subsidiary of the Việt Nam National Oil and Gas Group (PetroVietnam). 

At a roadshow, held in Hà Nội on Tuesday to introduce the investment opportunity, PV Power chairman Hồ Công Kỳ said the sale was part of the PV Power equitisation plan approved by the Prime Minister on December 8, 2017, under which the State would reduce its stake in PV Power to 51 per cent after PV Power became a joint-stock company. 

More than 676 million shares, equivalent to 28.88 per cent of PV Power’s chartered capital, would be sold to strategic investors, while the remaining shares, equivalent to 0.11 per cent of its chartered capital, would be sold to PV Power’s staff, he said. 

PV Power prioritised strategic investors who owned oil and gas fields and coal mines as they could provide fuel for the corporation’s electricity plants for a long term, Kỳ said. 

PV Power director Nguyễn Xuân Hoà said the priority enabled strategic investors to gain over 36 per cent of PV Power’s chartered capital and have veto power in the council of shareholders. 

The State’s capital in PV Power might decrease to below 51 per cent after 2019 once the corporation has successfully concluded its negotiations with international investors over the restructuring of loans for the Vũng Áng 1 thermal power plant, Hoà said. 

He also said the equitisation of PV Power had attracted attention from hundreds of investors, including electricity development investors that were more powerful than PV Power in terms of finance, human resources and capacity. 

Owners of oil and gas fields and coal mines from Indonesia, Australia, Qatar and Saudi Arabia have also been interested in the corporation’s shares. 

Hoà said at the workshop that PV Power had selected 30 qualified domestic and foreign investors for co-operation over the next five to 10 years. 

According to Decree No 126/2017/NĐ-CP, strategic investors are required to make profits in the last two years and hold on to PV Power shares for at least five years. 

PV Power has given priority to strategic investors who can allocate capital for the corporation to implement an array of thermal-power projects in future, as well as those who can improve its financial, personnel and technological management capacity, and operate in electricity generation. This is aimed at ensuring the supply of gas and coal for PV Power’s projects, once domestic natural resources decrease. 

Kỳ said PV Power prioritised investors who promised to operate and maintain coal-fuelled power projects invested by PetroVietnam. 

PV Power was established in 2007. The company operates one coal-based thermal power plant, three gas-based thermal power plants and three hydro-power plants. Its annual production is more than 4,208MW, equivalent to 10 per cent of the country’s total power output. — VNS