Vietnam: PV Power to sell 20% in IPO in revised plan, 29% strategic stake

Vietnam’s second largest electricity firm PV Power, a wholly owned unit of energy titan PetroVietnam, has revised its privatisation plan and now plans to sell a 20 per cent stake via an IPO and another 29 per cent to strategic investors in December this year.

Its previous plan, as reported in April, was to offload around 4 per cent of its equity to general buyers and its employees, and sell 45 per cent to strategic investors.

The company’s equity value was estimated at around $1.5 billion as per that announcement, when PV Power said it hoped to raise some $600-700 million from the share sale.

The newest IPO document from the firm on August 8 said its equity interest was $1.478 billion. An email inquiry to the company remained unanswered by the time of publishing this article.

Meanwhile, Vu Thu Ha, a senior analyst at Ho Chi Minh Securities JSC, opined that the hike in public share offer might stem from the increasing demand for financial investment in recent IPOs that enjoyed over-subscription.

“In addition, the risk of failing with an IPO is low, because unsubscribed shares, if there are, will be then offered to strategic investors,” she said.

PV Power was said to pick strategic investors in November. It had earlier revealed that a number of both global and local institutions such as BNP Paribas, Standard Chartered, SembCorp, GIC, Nexif, Keppel Infrastructure, Dragon Capital and VinaCapital had expressed interest in it.

Post IPO, the government – represented by PetroVietnam – will own 51 per cent of the company. There are plans to offload as much as 60 per cent to strategic investors in the future.

Privatised companies in Vietnam are required to list shares within one year from the IPO.

PV Power, with a 12 per cent power generation market share, recorded VND15.5 trillion ($682.8 million) in revenue in the first half of 2017, up 29 per cent year-on-year, and ushered in a net profit of VND1 trillion.

It aims to achieve VND30.8 trillion in revenue and VND1.78 trillion in profit before tax this fiscal year.

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