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BSR delays IPO plans to 2018

Released at: 17:12, 08/11/2017

BSR delays IPO plans to 2018

Photo from bsr.com.vn

IPO delayed yet again, this time to January at the latest.

by Quang Huy

The initial public offering (IPO) of Binh Son Refining and Petrochemicals (BSR), which operates the Dung Quat Oil Refinery, has been delayed from the planned November 7 until January at the latest, to allow for a larger stake to be sold, its CEO said.

The State-owned giant, which has repeatedly delayed its IPO, plans to sell more than the original goal of 4 per cent, which was expected to raise around $80 million, CEO Mr. Tran Ngoc Nguyen told foreign newswire Reuters, without providing any new targets.

The potential increase in the size of the IPO is backed by recent improvements in BSR’s business performance, Mr. Nguyen said. “Our revenues increased thanks to better market conditions and productivity,” he said.

Last week, he said that two foreign corporations doing business in the oil refining sector are seeking to buy BSR’s shares, including the US’s World Petro and Africa’s Macron Petro Petroleum.

A letter in response from Mr. John Webster, President of Macron Petro Petroleum, sent to BSR, said the company would join the race and seeks a 10-40 per cent stake.

World Petro, operating in the UK, the US, South America, and Singapore, expects to have a 49 per cent stake in the company. The State-owned Petrolimex also expressed an intention to buy shares in the Dung Quat Oil Refinery after the two parties signed a cooperation agreement in August.

Recent improvements in Dung Quat’s performance are positive factors for its IPO. The plant underwent maintenance for the third time in July.

BSR was valued at VND72.88 trillion ($3.2 billion) at the end of 2015, with the State holding a 60 per cent stake, according to a trade ministry report released earlier this year.

In the first six months of this year, BSR recorded revenue of VND38.65 trillion ($1.7 billion), up 15 per cent year-on-year, and net profit of VND3.83 trillion ($168 million), a four-fold increase compared to the first half of 2016.

The company projected revenue this year of VND62.4 trillion ($2.75 billion), down 17 per cent from 2016 due to expected falls in crude oil prices and the need for maintenance work.

In the central province of Quang Ngai, Dung Quat meets around one-third of Vietnam’s demand for fuel and oil products and has the capacity to process 6.5 million tons of crude oil a year.

The company is planning to expand to meet as much as 45 per cent of domestic demand by 2022.

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