Photos: Citi/Vietnam Airlines
Banks act as joint lead financial advisors for national flag carrier's sale of 8.771% to Japan's ANA.
Citi and Morgan Stanley completed the closing event on July 26 for a strategic sale transaction by Vietnam Airlines with Japan’s ANA Holdings Inc.
Vietnam’s national flag carrier has successfully completed the strategic sale of 8.771 per cent of its share capital to Japan’s largest airline group for VND2.431 trillion ($108 million).
The sale follows Vietnam Airlines’ domestic IPO that was completed in November 2014. Citi and Morgan Stanley acted as consortium advisors for Vietnam Airlines throughout the entire domestic IPO and strategic sale process.
The strategic partnership will enable both Vietnam Airlines and ANA to share operational and management know-how to improve service quality and tap the rising demand for air services in Asia, especially the Cambodia-Laos-Myanmar-Vietnam group of countries, which has significant growth potential in the region.
“Thanks to the advice from Citi and Morgan Stanley, Vietnam Airlines has successfully completed the equitization process and strategic sale, creating a firm partnership with ANA,” said Mr. Pham Ngoc Minh, Chairman of Vietnam Airlines. “The deals mark important milestones in Vietnam Airlines’ development and have enhanced our brand and image internationally.”
The cooperation with ANA, one of the world’s best customer service airlines, according to Mr. Minh, will further help upgrade Vietnam’s Airlines’ fleet with the newest generation of aircraft, expand its international footprint, and improve its service quality and efficiency.
Ms. Natasha Ansell, Managing Director and Citi Country Officer for Vietnam, said that Citi feels very proud and privileged to have been the joint lead financial advisor for Vietnam Airlines throughout the entire process of the landmark transaction.
“We believe this strategic sale will bring significant values to Vietnam Airlines and help increase its competitiveness in international markets,” she said. “It also demonstrates our strong commitment to bringing the best products and services together with our more than 200 years of expertise to support Vietnam Airlines in achieving its goal of becoming one of the leading airlines in the region.”
Mr. Gregory Thiery, Managing Director and Co-Head of Southeast Asia Investment Banking for Morgan Stanley, believes that ANA’s investment in Vietnam Airlines represents a landmark transaction in Asia’s aviation sector.
“It brings together two renowned airlines, providing ANA with access to attractive high growth markets in Vietnam, Myanmar, Laos and Cambodia while enabling Vietnam Airlines to leverage ANA’s best-in-class operations and service offerings,” he said. “Morgan Stanley is delighted to have acted as joint lead financial advisor to Vietnam Airlines. The transaction is testament to our leading advisory franchise in the global airline sector and the Vietnamese market.”
Under the partnership, ANA and Vietnam Airlines will launch code-share arrangements that will cover 30 major domestic routes within Japan and Vietnam and ten international routes between the two countries and a shared mileage program from the start of winter 2016. The two airlines also plan to combine a range of services, including passenger check-in, cargo loading, ground handling services, catering, aircraft maintenance, and other services at airports in Japan and Vietnam.
Vietnam Airlines operates 92 routes to 20 domestic and 29 international destinations with an average of 400 flights daily.
It operates a young fleet of 87 modern aircraft such as the Boeing 787 Dreamliner, Airbus A350-900 XWB, Airbus A330, Airbus A321 and Boeing 777. On July 12 it received a four-Star Airline Certificate from Skytrax, the world’s leading airline and airport rating organization.