EVN Genco 3 IPO raises a meagre $8.13m in yet another dud for Vietnam

Vietnam raised VND184.8 billion ($8.13 million) from the initial public offering (IPO) of Power Generation Corporation 3 (Genco 3), a subsidiary of Vietnam Electricity Corporation (EVN), on February 9. The proceeds were a measly 3 per cent of the government’s target of raising at least VND6.5 trillion ($286 million) from the stake sale.

In a reflection of low investor interest, only 7.45 million shares were sold of the 267 million shares on offer in the auction.

The disappointing auction followed the IPO of Vietnam Rubber Group (VRG) on February 2 that saw the government raise VND1.31 trillion ($57.7 million), far lower than its expectation of raising at least VND6.2 trillion ($273.1 million).

The Ho Chi Minh Stock Exchange earlier said in a statement published on its website that a total of 336 investors had registered interest in only 2.8 percent of that stake – amounting to less than 0.36 percent of the company – by the February 1 deadline.

According to analysts, the disappointing result was due to Genco 3 being overvalued. The power firm’s prospective price-to-earnings valuation of 19 times compared to an average of 15 for regional peers, senior analyst Vu Thu Ha of Ho Chi Minh City Securities was quoted as saying by Reuters.

“It is also more expensive than PetroVietnam Power (PV Power), which is valued at price-to-earnings of 13 times and the prospects of Genco 3 are not as promising as PV Power,” Ha said, adding that the latter’s power plants were more efficient.

The government last month raised $492 million by selling 20 per cent stakes in electricity producer and distributor PV Power and oil firm Petrovietnam Oil Corp (PVOIL).

Genco 3’s revenue in 2017 was estimated at over VND34.6 trillion ($1.52 billion) and profit at VND1.27 trillion ($55.8 million). Its total capacity reached 6,304MW, accounting for 16 per cent of the nation’s electricity system.

EVN currently owns 51 per cent of Genco 3’s charter capital. It would divest its capital at the subsidiary to less than controlling level after 2019 if successful in restructuring its debts and negotiating with lenders.

Also Read:

Vietnam: EVN subsidiary Genco 3’s IPO fails to pique investor interest

Vietnam Rubber Group IPO raises $57.7m, far lower than govt target

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

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  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.