Oman’s State General Reserve Fund (SGRF)has proposed to the Vietnamese Government that it is willing to purchase shares of Hai Phong Port if the local government offloads more than the intended 29.68 per cent.The fund plans to do the transaction through its Vietnam Oman Investments (VOI Fund) joint venture with the Vietnam State Capital Investment Corporation.
This overture is likely to compete with Vietnamese companies, which are in the race to gain a majority stake in the northern biggest port of the country. Previously, Vietnam’s realty major Vingroup, led by billionaire Pham Nhat Vuong, has shown its interest in up to 80 per cent in the port.
Meanwhile, the Oman sovereign fund stated that it will work with local investors to form an investment combination, if the purchase of the entire state capital in Hai Phong Port is in excess of the foreign ownership limit, as regulated by the Vietnamese law.
Prior to the proposal, the VOI Fund has already received in-principle approval by the Vietnamese prime minister, to acquire 29.68 per cent in Hai Phong Port, from the 94.68 per cent held by the Vietnam National Shipping Lines (Vinalines).
In addition, SGRF has committed to support the port with $2 million, per year, for a three-year term for the costs of human resources and management. This will help to transform the port into an important link of the international port system.
Oman’s largest wealth fund, established in 1980, has a total asset of $35 billion. It has also invested in a spate of seaports in Turkey, Netherlands, Belgium and Brazil.
When compared with Vingroup, the fund has the advantages not only in terms of investment experience in ports, it also has the superior position of a 23 year diplomatic relation with Vietnam.
The two countries have signed nine bilateral agreements. In 2014, two-way trade turnover reached $65 million, while the VOI Fund has invested some $51 million in Vietnam in the banking, hydropower, healthcare and infrastructure sectors.
Vietnam’s minister of transport Dinh La Thang also shared his view that the country needs to develop the operation of the Vinalines ports rather than keep them state-owned. By acquiring a majority of stake, the investors will be able to commit long-term and effective resources to the ports, Thang explained.