Vietnam: Dung Quat Refinery plans for IPO

Vietnam: Dung Quat Refinery plans for IPO

Viet Nam's first oil refinery operator Binh Son Refinery and Petrochemical
Co Ltd (BSR) has planned its domestic initial public offering (IPO) with 5-6
per cent of its capital in the fourth quarter of the year.

The information was announced on Thursday. BSR, which owns the US$3-billion
Dung Quat Oil Refinery, added that the remaining shares would be offered to
strategic investors.

Tran Ngoc Nguyen, BSR's general director, said it has selected a consultancy
firm to implement divestment plans at the three capital contribution units
of PV Building, PMS and PVOS to prepare for the IPO.

Answering a question on the modest rate of the IPO, Nguyen said BSR had
carefully considered the number of offered shares and taken note of
recommendations from the consultancy firm.

Nguyen added that all information on business value and offered price would
be announced next week after receiving approval from the Ministry of
Industry and Trade.

The IPO will be divided into two periods. During the first period, BSR will
be transferred into a privatisation model, offering shares to its staff and
an IPO which is set to be completed in 2017. It will complete the offering
to strategic investors in the next 12 months.

He expected BSR to sell up to 36 per cent of its shares to strategic
investors with strong financial resources and experience in the refinery
sector.

Sharing the idea, Nguyen Hoai Giang, BSR's chairman, said the privatisation
model had been under consideration since 2013.

Giang affirmed the determination for privatisation despite the unfavourable
conditions of the financial market and decreasing oil prices, which had
affected investors' confidence.

He expected BSR would be privatised at the earliest to attract strategic
investors to participate in the refinery's expansion and development in the
future.

Since its operations in 2009, the refinery's total revenue is VND834
trillion and profit is VND13 trillion. In the first five months of the year,
its revenue reached VND35 trillion, representing an increase of 18 per cent
from the set target.

Temporarily closed for overall maintenance

Dung Quat Oil Refinery in central Quang Ngai Province will be temporarily
closed to undergo a nearly two-month full maintenance process.

The general director said the third overall maintenance will start on June 5
and continue for 52 days.

"Some 4,000 specialists, architects and workers, with special equipment and
thousands of machines will participate in the maintenance. The maintenance
aims to help the refinery run stably and safely and extend its operation
time after 3-4 years," he said.

The maintenance will be divided into seven main packages. Three foreign
contractors from Singapore, Malaysia and South Korea will participate in the
maintenance.

However, BSR will take measures to shorten the scheduled time of 5-7 days.
It is estimated that the refinery could increase revenue by VND250 billion
and contribute VND30 billion per day if the maintenance time is shortened,
he added.

Dung Quat, the first-ever oil refinery of Viet Nam, opened in 2009 with
capacity of 6.5 million tonnes of crude oil annually, or 140 thousand
barrels per day. The refinery was put into official operation in 2009 and
has undergone overall maintenance twice -- in 2011 and 2014.

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Link to Original Article:
http://english.vietnamnet.vn/fms/business/178798/dung-quat-refinery-plans-fo
r-ipo.html

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com