PM approves equitization plan, with IPO to be conducted in third quarter.
The Ministry of Finance (MoF) approved the equitization plan for the Airport Corporation of Vietnam (ACV) on June 30.
In the third quarter the Ministry of Transport (MoT) will conduct an initial public offering (IPO) of 77,804,122 shares (3.47 per cent of its charter capital) at an offering price of VND11,100 ($0.51) per share.
The State will retain 75 per cent of charter capital, 0.41 per cent will be sold to staff at a preferential purchase price, 0.13 per cent will be sold to the trade union at a preferential purchase price, 20 per cent will be sold to strategic shareholders, and 3.47 per cent will be sold to the public.
In December last year MoF valuated ACV at VND37.91 trillion ($1.73 billion) as at June 30, 2014, with the State holding VND20.76 trillion ($952.05 million) in capital.
MoF proposed to the Prime Minister that State ownership be reduced from 75 per cent to less than 65 per cent by selling more shares at a suitable time after ACV has been equitized.
In the fourth quarter of 2014 ACV successful conducted IPOs for its two largest subsidiaries: Southern Airports Services Joint Stock Company (SASCO) and Saigon Ground Services (SAGS), with over VND1 trillion ($45.86 million) collected in total. Demand for the shares was high, as the volume registered for purchase was 15 times higher than the number offered.
The purchase prices were relatively high, at VND44,693 ($2.05) per share for SAGS (3.6 times higher than the offering price) and VND19,300 ($0.89) per share for SASCO (around 2 times higher than the offering price).
The equitization of ACV has drawn a lot attention from investors in Japan and France. At the end of March, at a meeting with the Minister of Transport, Mr. Augustin de Romanet, Chairman and CEO of Aéroports de Paris (ADP), proposed it be the strategic shareholder of ACV, buying 25-30 per cent before the IPO.
ACV advantages are appealing, as it operates 22 commercial airports, eight of which are international airports, has three subsidiaries, and invests in ten other joint stock companies, all within its core business.
In 2014 it earned total revenue of VND9.09 trillion ($416.86 million), accounting for 112.7 per cent of the plan. Profit after tax was VND1.69 trillion ($77.50 million), or 141 per cent of the plan.
Local investors believe the money collected from the IPO and further share sales will not be used to increase its charter capital but rather invested in the Long Thanh International Airport project in southern Dong Nai province.