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PV Power to conduct large-scale divestment in months ahead
Nguyen Tung 16:55, 2018/01/25
PetroVietnam Power (PV Power) is scheduled for an Initial Public Offering (IPO) on January 31 and then a listing on the Unlisted Public Company Market (UPCoM) on March 16, according to the latest report of Ho Chi Minh Security Corporation (HSC).
Under the approved equitization plan, the government will reduce its shareholdings in PV Power from 100 to 51% after 3 rounds of divestment.
 
PetroVietnam Power (PV Power) is scheduled for an Initial Public Offering (IPO) on January 31.
PetroVietnam Power (PV Power) is scheduled for an Initial Public Offering (IPO) on January 31.
Firstly, PV Power will sell 20% of the shares through its IPO, equivalent to 468.37 million shares with an initial price of VND14,400 (US$0.6) per share. The deal is expected to raise VND6.7 trillion (US$294 million) in proceeds. The registration deadline for the auction is January 24. 

PV Power will then continue selling 28.8% shares, or 676.38 million shares, to strategic investors through private placement, followed by the selling of 0.111% of preferred shares (2.67 million shares) to its employees and staff. 

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. 

After completing the IPO, PV Power is expected to be listed on the UPCoM on March 16. 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. 

In 2000-2014, the average growth rate of per capita electricity consumption was 12%, the second highest in Southeast Asia, behind Cambodia’s 16%. In the next three years, this growth rate is estimated at 10%, higher than the regional average of 7.3%. 

In 2016, PV Power’s total electricity production reached 21.131 billion kWh, with a consolidated revenue of VND28 trillion (US$1.2 billion), posting an after-tax profit of VND1.5 trillion (US$66 million). In 2017, PV Power’s electricity production has slightly decreased to 20.58 billion kWh, but consolidated revenue has increased to nearly VND31 trillion (US$1.37 billion) and after-tax to VND2.3 trillion (US$102 million). 

PV Power’s revenue and profit are expected to grow by 10 and 22%, respectively, in the 2018-2020 period, according to HSC’s evaluations. 
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