VietJet reconsiders international IPO, forecasts 30% profit ahead of listing in Vietnam

Image courtesy VietJet's official website

Vietnam’s first private airliner Vietjet is reportedly reconsidering its overseas IPO plan, even as it is readying to list its shares on the local Ho Chi Minh City Stock Exchange next month.

Vietjet had for long targeted an overseas and had said last year that it would explore a listing in either in Singapore or in Hong Kong.

Luu Duc Khanh, managing director of the budget airline, told DEALSTREETASIA that the company decided to make a home debut first to test investor appetite.

In preparation for the domestic IPO next month, as reported by this portal earlier, Vietjet has sold a more than 24 per cent stake to a total of 26 international investors in private placements, including Singapore’s GICMorgan Stanley, Mirae Asset, Dragon Capital and VinaCapital.

The airline, known for its bikini-clad flight attendants, has said that around 30 institutional investors had showed interest in its shares, which were oversubscribed by 1.8 times and worth $265 million in bidding.

It is also in talks with the region’s carriers and banks for a strategic investment, as per a report on Bloomberg.

Amid the encouraging bidding interest, Vietjet still hopes to become the country’s first business to make a debut on a foreign capital market.

A number of Vietnamese companies had also shared about their intention to list overseas, but so far, none have managed to do so.

Nguyen Thi Phuong Thao, the female billionaire CEO of the low-cost carrier, told Reuters that the company will also likely look at listing in Japan, in addition to the options of Singapore and Hong Kong.

However, she did not give a clear timeline for the revived overseas listing plan.

An email inquiry sent to Vietjet had not prompted a response at the time of publishing this story.

Domestically, Vietjet is expected to trade its shares in the fourth week of February, according to sources familiar with the transaction.

The pre-listing placements give Vietjet a $1.2 billion valuation. There have been various reports about the price of the deal, from around VND84,000 to more than VND86,000 per share.

Founded in 2007, Vietjet turned profitable in 2013, which made the company work on the listing plan. It expects profit to improve as much as 30 per cent this year from the $101.8 million mark achieved in 2016, riding the growing aviation market as well as a promising outlook for the upcoming IPO, several media reports cited Thao as stating.

With some 43 per cent market share, Vietjet operates 60 domestic and international routes with a fleet of 42 aircraft. The Reuters report added that the company aims to increase its fleet to 200 aircraft by 2023.

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