Vietnam speed up equitization process of energy firms
Vietnam has accelerated its privatization program in recent weeks in an overall effort of the country’s economic restructuring.
The country hopes to raise a total of more than $570 million by selling stakes in an oil refinery, an oil distribution firm and a power company. Vietnam has accelerated its privatization program in recent weeks in an overall effort of the country’s economic restructuring.
Vietnam aims to raise at least 297 million USD by selling a 20 percent stake in Petrovietnam Power Corporation (PV POWER) and at least 155 million USD by selling 7.79 pct of the Binh Son Refining and Petrochemical company under the management of PetroVietnam (PVN). In addition to the sale of those shares in initial public offerings (IPOs), the government said it planned to sell a 28.9 percent stake in the power company and a 49 percent stake in the refinery to strategic investors.
The government also approved an earlier planned IPO in oil distribution firm PetroVietnam Oil Corp (PV Oil), aiming to raise at least $122 million by selling a 20 percent stake, equivalent to approx. 207 million shares and 13,400 VND per share.
Strategic investor has to ensure to have sufficient financial capabilities, as well as necessary fund confirmed by the latest financial report of at least 2 trillion VND, while in the last 2 years till the period of registering for share purchase, the strategic investor in subject has have no loss in business, as well as accumulated loss.
Specifically, the registered capital of PV Oil is more than 10 trillion VND, in which PVN holds 363 million shares, owning 35.1% of the above mentioned capital. On the other hand, 462 million shares of PV Oil are expected to be sold for strategic investors, equivalent to 44.72% of its shares. Foreign investors are allowed to buy shares at PV Oil with shares ownership capped at 49% of total registered capital.
With regard to PV POWER, the equitization process will be in line with the strategy of government divestment plan. The registered capital of PV Power is nearly 23.5 trillion VND. In which, PVN holds 1.2 billion shares, equivalent to 51% of shares. Shares are open for public auction are 468 million shares, equivalent to 20% of shares. Shares are expected to sell for strategic investors are 676 million shares, equivalent to 29% shares. Initial price for share selling is 14,400 VND per share.
Binh Son Refining and Petrochemical company has capital of 31 trillion VND. This number is not included investment fund required for the upgrade and expansion of the Dung Quat Oil Refinery, which is after the period of valuing the company.PVN currently holds 1.3 billion shares, equivalent to 43% of shares. 242 million shares are expected to sell in public auction, equivalent to 7.79% shares. There will be more than 1.5 billion shares sell for strategic investors, equivalent to 49%of shares.
The three share sales are expected within three months, the government said, without giving more precise details of the timing. Last month, Vietnam unveiled plans to sell a stake of up to 54 percent, worth $5 billion, in the nation's biggest brewer, Sabeco, in what is set to be the country's largest privatisation yet.
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