Illustrative photo (Photo: VNA)Hanoi (VNS/VNA) –The PetroVietnam Power Corporation (PV Power), the country’ssecond-biggest power provider, will offer 20 percent of its total shares forsale at an initial public offering (IPO) in December.
Themember company of the Vietnam Oil and Gas Group (PVN) will also sell 29 percentof its capital to strategic investors.
Undera previous IPO plan published in April, the company said it would sell 4 percentof shares at the IPO and 45 percent to strategic investors to receive 600-700million USD.
Theprevious plan also stated that the IPO would be conducted in August 2017 andthe private offering for strategic investors would be completed this year.
[PV Power prepares for August IPO]
Thecompany also expected to raise its ratio of shares for sale up to 60 percent ifapproved by the Government.
PVPower has constantly re-scheduled its IPO plan. In June 2016, the companyplanned to hold its IPO in October the same year and unload a quarter of theState’s ownership.
Accordingto HCM City Securities Corporation, the company’s decision to raise the numberof shares for IPO sale could stem from the fact that State-owned businesseshave failed to offload all the shares they offered to strategic investors.Individual investors were far more interested in IPO shares and the number oftheir placed orders exceeded the number of shares offered by the companies.
Accordingto analysts, there are several reasons that have made State-owned company IPOsunattractive to strategic investors.
First,those companies conducted their IPOs when market demand was not high, leadingto low purchases of their shares. Second, institutional investors were hesitantto purchase shares in those companies because the Government still held thecontrolling stake in the businesses after it was equitised.
Inaddition, the auction prices offered at the IPOs did not match investorexpectations while the management boards of some firms were afraid of becomingtransparent and accountable.
Inthe latest IPO plan, posted on the company’s website last week, PV Power had 21.7trillion VND in charter capital and was valued at 60.6 trillion VND on December31, 2015.
PVPower is currently the second-biggest power provider in Vietnam, supplying 12 percentof the country’s total electricity production with seven power plants producingtotal output of 4.2 gigawatts.
Thecompany last year produced 21,156 billion kWh, earning 26.5 trillion VND inrevenue and 1.6 trillion VND in post-tax profit.
Ittargets production output of 21 billion kWh in 2017, 30.8 trillion VND inrevenue and 1.56 trillion VND in post-tax profit.-VNA
