Swedish firm invited to take part in Mobifone's equitization
Comvik is interested in the Vietnam`s government effort of the Mobile Telecom Service Company (Mobifone), said Zaman, the Chairman of Comvik Vietnam.
Following the available technologies and financial capabilities, Comvik is prepared to support Vietnam's government in Mobifone's equitization, added Zaman in a meeting with The Deputy Prime Minister Vuong Dinh Hue on May 11.
Mobifone is scheduled to launch its IPO in 2019.
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The Deputy PM encouraged Comvik to invest in Vietnam, as well as taking part in the Mobifone's equitization process.
In previous plan, Mobifone was required to complete the equitization plan in 2018, however, the plan did not materialized due to a number of reasons, Hue said.
"The government has instructed the Ministry of Information & Communications to prepare for all necessary requirements, so that the Mobifone's initial public offering (IPO) could be launched in 2019," Hue stressed.
"A plan for equitization should also be submitted to the government for review and approval. One sticking point is to clarify the importance of strategic investors, what are required of them, the state capital ownership, and the number of shares to be offered to strategic investors."
Mobifone set revenue growth target in 2018 at 6%, significant lower than the rate of 14% in 2017, according to the company`s audited financial report in 2017.
The telco's revenue in 2017 reached VND40 trillion (US$1.76 billion), up 14% year on year. However, due to the increase in expenses, Mobifone's accumulated profit was at the same of 2016, reaching VND12 trillion (US$529.2 million).
By the end of 2017, Mobifone's pre-tax profit is recorded at VND5.6 trillion (US$247 million), increasing 8% compared to previous year. As at December 31, 2017, the telco's total assets worth VND30 trillion (US$1.32 billion), up 20% compared to the year beginning.
Released on March 14, the Government Inspectorate's inspection result found that Mobifone was irresponsible and violated a series of regulations during the acquisition of AVG. Following the results, GI recommended the Ministry of Public Security to take over the investigation and prosecute violators in accordance with the law.
The deal caused great controversy as its value was 2.58 times higher than AVG's charter capital of VND3.6 trillion (US$158 million) at the time of completing the transaction on January 2, 2016. The investment in AVG was equivalent to 55% of Mobifone's charter capital (VND16.2 trillion or US$711 million) and 40% of its total assets (VND23.2 trillion or US$1.02 billion) as of June 30, 2016.
At present, Mobifone and related government agencies are responsible to implement recommendations suggested in the inspection result.
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Vietnam news in brief - August 24
Read The Hanoi Times to stay up to date on developments in Vietnam.
- Growing number of FDI firms moving to Vietnam
- Vietnam Gov’t committed to facilitating Adani Group’s US$2-billion port project
- Vietnam Railway proposes US$87 million for Hanoi–Dong Dang railway upgrade
- Vietnam’s North-South high-speed railway to be designed for 350km/h
- Vietnamese gov’t urged to address impact of global minimum tax
- Samsung plans drastic investment increase in Vietnam over next three years