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BSR IPO exceeds expectations

Released at: 11:12, 18/01/2018

BSR IPO exceeds expectations

Photo: BSR

Government raises $245 million from January 17 IPO of Binh Son Refining and Petrochemical Company.

by Hong Nhung

The Binh Son Refining and Petrochemical Company (BSR), the operator of the Dung Quat Oil Refinery in central Quang Ngai province, held an initial public offering (IPO) on January 17 at the Ho Chi Minh Stock Exchange (HoSE), auctioning 7.79 per cent of its charter capital, or 242 million shares, at a starting price of $0.64 (VND14,600) per share.

Winning investors totaled 623, of which 62 were organizations and 561 were individuals. Foreign investors secured more than 147 million shares. With an average sale price of VND23,043 ($1), the government reaped VND5.566 trillion ($245 million) from the auction.

Registrations were made for nearly 652 million shares - 2.7 times higher than the offering - of which domestic investors sought 248 million and foreign investors more than 338 million.

Some 4,079 investors registered to purchase shares during the three weeks registrations were open, 3,957 of which were local individual investors, seven foreign individuals, 48 local organizations, and 67 foreign organizations.

BSR will now go ahead and sell 49 per cent to strategic investors, both domestic and foreign, with the State to retain a stake of 43 per cent.

“Following the success of IPOs for arms of PetroVietnam, such as PVFC, PV Drilling, and Ca Mau Fertilizer, the corporation is now proceeding with IPOs for three of its large units - BSR, PV Power, and PV Oil,” Mr. Le Manh Hung, Deputy General Director of PetroVietnam, said at the auction. “BSR is the largest State-owned enterprise to conduct an IPO. It will develop sustainably in the future based on favorable business results over recent years along with advanced technology and progress in science and technology made by the team of engineers at Dung Quat. PetroVietnam will continue to support BSR in providing high quality human resources, stable crude oil resources, and modern enterprise management.”

“BSR recorded impressive business results in 2017,” said Mr. Nguyen Hoai Giang, Chairman of BSR. “Production output was 6.1 million tons, consumption nearly 6.1 million tons, turnover $3.54 billion, State budget contributions $456.2 million, and after-tax profit about $353 million. Besides increasing production, Dung Quat’s energy consumption, catalytic chemicals, and inventories are falling. All of this indicates the company is growing.”

Many foreign investors have expressed an interest in a stake in BSR, seeking to become strategic partners.

Vietnam needs more refineries, as Dung Quat is capable of meeting just 30 per cent of domestic demand. The Nghi Son Oil Refinery in northern Thanh Hoa province, which is due to begin commercial operations this year, will bring total supply to 80 per cent of demand.

The government is also selling shares in two other State energy firms: the PetroVietnam Power Co. and the PetroVietnam Oil Corp, later this month.

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