Vietnam: PV Oil extends strategic share offer to 50%, delays June IPO

Vietnam: PV Oil extends strategic share offer to 50%, delays June IPO

PetroVietnam Oil (PV Oil), Vietnam's sole crude oil exporter, has increased
the percentage of state divestment to almost 65 per cent, from an earlier
fixed limit of 55 per cent.

Accordingly, the parent group, PetroVietnam - representing the state
ownership, will hold only 35.1 per cent equity interest in the company after
the IPO slated in 2017, according to a PV Oil update on its website.

Under the revised privatization proposal, PV Oil will sell as much as 50 per
cent to strategic investors compared to a prior announcement of 49 per cent
stake.

Meanwhile, the shares offered to the public will be retained at 15 per cent.


The company did not disclose the strategic investors, but said interested
bidders included 10 foreign firms from Japan, South Korea, Russia, Middle
East and Southeast Asia, as well as two local investors.

It did not give updates on the number of selected strategic shareholders,
but an earlier notice had pointed out the number will not exceed three
investors.

PV Oil described the larger offered stake "attractive compared to
Petrolimex" - its peer who sold an 8 per cent equity to Japan's JX Nippon
Oil & Energy and currently has a dominating 50 per cent share in the petrol
retailing market.

PV Oil said it had around 22 per cent share.

Giving up the controlling interest in the company, the local state will
still be holding veto power with its 35.1 per cent ownership.

PV Oil said the IPO, earlier expected to take place in June, will be delayed
as privatization enactment had not been fully completed.

Bloomberg reported in March that PV Oil expected to raise at least $270
million from selling 40 per cent to one or two strategic investors, a
threshold that valued the company at $675 million.

Meanwhile, the latest approved corporate value stands at VND10.34 trillion
($453.5 million).

However, strategic investors often pay a bit higher than IPO share prices,
as recorded in other IPOs.

As per expansion plan post privatisation, PV Oil plans to raise $280 million
for M&A purpose within the next five years to boost its market share to 35
per cent.

The company posted a profit before tax at VND222 billion in the first
quarter of 2017, while it made a loss of VND105 billion in the same period
in 2016.

This year, energy titan PetroVietnam is also looking to privatize its
electricity generation unit PV Power, selling 49 per cent equity through IPO
and strategic shares to raise some $600-700 million.

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Link to Original Article:
https://www.dealstreetasia.com/stories/vietnam-pv-oil-extends-strategic-shar
e-offer-50-delays-june-ipo-73690/

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com