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BSR IPO set for November 7

Released at: 09:38, 27/06/2017

BSR IPO set for November 7

Photo: BSR

Starting price at VND10,000 per share, with total offering to be determined closer to IPO.

by Hong Nhung & Duy Anh

Vietnam’s sole oil refinery operator, Binh Son Refinery (BSR), has announced it will hold its initial public offering (IPO) on November 7, with a starting price of VND10,000 ($0.44) per share.

The actual stake to be offered, which is likely to be around 5 or 6 per cent, will be decided closer to the IPO date so it reflects market circumstances.

“We have predicted the amount to be gained from the IPO, but I can’t reveal it at the moment because it’s increasing,” BSR CEO Mr. Tran Ngoc Nguyen told VET. “Our profitability is quite good.”

The amount gained from the IPO will be used to help BSR fund its expansion plan into the petrochemicals sector. It earlier released plans to take up a $1.2 billion loan to improve and expand Dung Quat, with the expansion expected to be completed in 2020 and cost $1.82 billion, 30 per cent of which is equity and the remaining 70 per cent being loans.

Last month, BSR, which operates the Dung Quat Oil Refinery in central Quang Ngai province, Vietnam’s only operating refinery, announced it was valued at approximately VND72.88 trillion ($3.2 billion) as at the end of 2015, with State capital at more than VND44.9 trillion ($1.97 billion), making it the largest company in terms of capital to be equitized to date.

Concerning the strategic stake sale, “we are likely to dispose of more than half of the equity in several tranches,” Chairman Nguyen Hoai Giang told VET, saying the government has recently given approval to selling a controlling stake in the refinery to either domestic or international investors.

“Everyone is still shopping in the market right now,” Mr. Giang added. “We have not decided on the strategic shareholder as yet.”

Declining to disclose whether the targeted investors were major corporates or investment funds, the Chairman did say that several investors, both international and local, had expressed an interest in BSR since the company sent invitations to 15 investment funds earlier this year.

“Once the strategic shareholder is identified, we will all sit down and negotiate a price based on the amount they seek, and this selling price differs between each potential buyer and their level of interest,” Mr. Giang explained.

BSR had so far talked to Japan’s JX Nippon Oil & Energy Corp., South Korea’s SK Energy Co. and Russia’s Gazprom Neft, among others, on potential strategic stake sale, but discussions had not progressed.

BSR’s net profit fell 27 percent in 2016 to VND4.49 trillion ($198 million), the company’s financial statements reveal.

In the first quarter of this year, it posted revenue of VND21 trillion ($923 million), or 33 per cent of its full-year target, a positive result after it was projected at VND62.4 trillion ($2.74 billion), down 17 per cent against 2016, with profits to plunge 66 per cent to VND1.68 trillion ($739.3 million).

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