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PV Power raised US$308 million through IPO
Nguyen Tung 20:57, 2018/01/31
The Vietnamese government has raised US$308 million (VND6.996 trillion) by selling 20% of PetroVietnam Power (PV Power) in an initial public offering (IPO) on the Hanoi Stock Exchange on January 31.
With total shares offering of 468 million shares and initial price of VND14,400 (US$0.6) per share, the proceeds were 4% higher than the government’s expectations of at least $295 million from the IPO. 
 
PV Power is the second largest electricity provider in Vietnam in terms of capacity.
PV Power is the second largest electricity provider in Vietnam in terms of capacity.
Nearly 2,000 investors including 94 organizations and 1,834 individuals participated in the auction. Foreign investors bought 284.44 million shares on offer and now hold a combined 12.14% stake in the state-owned firm. 

Following the successful IPO, PV Power will continue its equitization plan approved by the Prime Minister, including the organization of the first shareholder meeting and listing shares on the Unlisted Public Company Market (UPCoM) in the next 3 months. 

PV Power will also further sell 676 million shares or 29% of its charter capital to strategic investors. Strategic investors have to record positive after-tax profit in the two latest consecutive years with no accumulated loss, while they also have to commit not to transfer their acquired shares in the next 5 years. PV Power is working with Vinacapital, BNP Paribas, and Standard Chartered Bank on the process of equitization and on seeking out strategic investors. 

Vietnam National Oil and Gas Group (PetroVietnam) will hold 51% of PV Power on behalf of the government after the electricity firm becomes a joint-stock company. 

The market capitalization of PV Power at the share price of VND14,400 is estimated at US$1.48 billion while its charter capital is projected at VND23.4 trillion (US$1.04 billion) after the equitization process is completed. 

According to estimates by Ho Chi Minh City Securities Corporation (HSC), PV Power’s net sales in 2017 stood at VND31.5 trillion (US$1.38 billion), up 12% year-on-year, while its after-tax profit stood at VND1.9 trillion (US$83.6 million), up 25%. 

PV Power is the second largest electricity provider in Vietnam in terms of capacity, only behind Vietnam Electricity (EVN) that holds 61% of the market share.

Meanwhile, Vietnam is one the fastest growing electricity markets in Southeast Asia, with an average growth demand in the next 3 years expected at 10%. PV Power, thus, expects to increase its current supply of 12% of the country’s total electricity produciton to15% by the end of 2026. Under its own assumptions, by that time, PV Power’s electricity generation capacity will increase by 160% from 4,208 to 10,958MW, mainly thanks to the construction of thermal power plants. 

Earlier this month, the government raised US$245 million by selling a 7.79% stake in refinery operator Binh Son and another US$184 million by selling 20% of PVOil.
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