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Petrolimex delays listing to mid-April

Released at: 11:02, 06/03/2017

Petrolimex delays listing to mid-April

Photo: Duc Anh

Chairman tells Reuters that listing is expected around April 10-12.

by Duy Anh

Contrary to the original plan, the State-owned Vietnam National Petroleum Group (Petrolimex) expects to list its shares on the Ho Chi Minh City Stock Exchange (HoSE) around April 10-12, Chairman Mr. Bui Ngoc Bao told Reuters.

The listing is part of the government’s push to equitize State-owned firms to attract investment and bridge the widening budget deficit. The country’s top oil products distributor has a valuation of around $2.3 billion, which would rank it among the Top 10 listed firms.

Three-quarters of Petrolimex is currently owned by the government, with Japan’s JX Holdings picking up 8 per cent in mid-2016. According to Mr. Bao, Petrolimex had not yet set a listing price, which was expected at around its value on the over the counter (OTC) market.

Saigon Securities, the adviser to Petrolimex’s listing, said in a report on March 3 that its shares trade at around VND40,000 ($1.75) on the OTC market. Meanwhile, based on VET’s research, Petrolimex’s shares are seeing buying orders around the VND45,000 ($1.97)-VND50,000 ($2.2) price range.

Vietnam, which is slowly opening up its domestic market amid considerable investment interest, has completed several major share sales and listings in recent months, including a $3.72 billion listing of its top brewer, the Saigon Beer, Alcohol and Beverage Corporation (Sabeco), in which the government owns nearly 90 per cent.

“Petrolimex expects to have only one strategic investor, which is JX, in our core business of petrol and oil,” Mr. Bao was quoted as saying, adding that it expects to raise JX’s ownership to around 20 per cent in the future.

Petrolimex has a market share of around half in Vietnam’s oil and petrol retail and distribution market. Last year’s business results were impressive, especially estimated profits earned by member companies: Petrolimex Aviation VND372 billion ($16.4 million), Van Phong Bonded Oil Warehouse VND188 billion ($8.3 million), Petrolimex Singapore VND74 billion ($3.26 million), and Petrolimex Laos VND14 billion ($618,000). Petrolimex also contributed VND32 trillion ($1.4 billion) to the State budget last year.

The Group earned a net profit of $226.6 million on revenue of $5.4 billion, up 50.2 per cent and down 16.2 per cent, respectively, against 2015.

In an interview with local media last month, Mr. Bao said he expects Petrolimex to list during the first quarter of this year and said the reason for the relatively late listing was that it had not satisfied all the necessary conditions as yet. “At the time, State capital in Petrolimex was sufficient,” he was quoted as saying. “Concurrently, Petrolimex completed issuing additional shares and selling shares to foreign strategic partners, reducing State capital to less than 75 per cent in accordance with the approved equitization plan.”

Japan’s JX Holdings is Japan’s largest company and has operations similar to Petrolimex, according to Mr. Bao. By March 2016, it accounted for 50 per cent of the local market share. “They have a long history of more than 100 years, experience in the organization of business activities, and development strategies similar to ours,” he added.

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