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SCIC hopes to fetch $103mn from Binh Minh Plastic auction

Released at: 10:10, 01/03/2018

SCIC hopes to fetch $103mn from Binh Minh Plastic auction

Photo from binhminhplastic.com.vn

24.15 million shares of plastics producer to be auctioned on HoSE on March 9 with a starting price of $4.26.

by Quang Huy

Sovereign wealth fund the State Capital Investment Corporation (SCIC) has announced that the starting price of Binh Minh Plastic JSC (BMP) shares at its March 9 auction is VND96,500 ($4.26).

The sale of a 29.52 per cent State stake in BMP, or 24.15 million shares of the plastics producer, will be implemented through a public auction at the Ho Chi Minh Stock Exchange (HoSE). At this starting price, the sale is expected to raise VND2.33 trillion ($103 million) for the State treasury.

After the State Securities Commission (SSC) allowed BMP to expand its foreign ownership limit to 100 per cent in last September, the largest shareholder of BMP, Nawa Plastic Industries, owned by Siam Cement Group subsidiary Thai Plastic and Chemicals, has expressed an interest in increasing its holdings in the company.

The Ho Chi Minh Securities Corporation (HSC) in an October report said the Thai firm has ambitions to build an integrated system value chain in the plastics industry in Vietnam. Having controlled 70 per cent of the TPC Vina Plastic and Chemical Corp. (TPC Vietnam), a local company producing plastic resin, Nawa Plastic has for some time been interested in adding a plastic products manufacturer with a decent distribution network in Vietnam.

In that case, there are only two serious contenders: BMP, whose products are popular in the south, and Tien Phong Plastic (NTP), whose products cover the northern market.

While a merger was always one possibility, the fact that Nawa sold its stake in NTP, totaling 21 million shares, last September suggests that they may now be considering owning only BMP, according to HSC.

With some 50 per cent market share in southern Vietnam and 25 per cent in the country as a whole, BMP is a leader in the plastic pipes market and has 41 years of experience. The company has an extensive distribution network with 15,000 sales points throughout the country, with major products including pipes and fittings made from a wide range of different plastic components, such as uPVC, HDPE and PP-R, which are suitable for construction and housing.

The company last year recorded a pre-tax profit of nearly VND583 billion ($25.6 million) with earnings per share (EPS) at VND5,768 ($0.25). Nawa Plastic is the largest shareholder in BMP, with a 20.4 per cent stake, followed by Franklin Templeton Investments, a US-based global investment company, with 10.78 per cent.

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