Vietnam Airlines in talks with foreign investors for selling more shares

Visual from Vietnam Airlines website.

Vietnam Airlines Corp. will offer more shares to foreign investors, including possibly another airline, as it prepares a listing on the Ho Chi Minh City Stock Exchange next year and the government plans to cut its holdings to 51 percent.

The carrier — which sold an 8.8 percent stake to  ANA Holdings Inc. last year for $108 million — is discussing the sale of another 4.1 percent stake as early as this month with potential investors, Vietnam Airlines Chief Executive Officer Duong Tri Thanh said Thursday. Japan’s largest airline, which is limited by Japanese regulation to a 10 percent stake in Vietnam’s national carrier, may be interested in “other opportunities in our subsidiaries,” he said in a Bloomberg Television interview with Haslinda Amin.

“The share sales will enable Vietnam Airlines to continue implementing an ambitious investment plan of expanding and upgrading its fleet and improving overall service quality,” Thanh said in a separate interview during the Asia-Pacific Economic Cooperation CEO summit in Danang, Vietnam. The first batch of shares from the additional stake sale could be sold later this year or in 2018, he said. Interested investors could be another airline or financial institutions, Thanh said.

The state-owned airline, currently listed on Hanoi’s Unlisted Public Company Market — the so-called over-the-counter regulated market — plans to also list on the country’s benchmark stock exchange in Ho Chi Minh City next year, he said.

Fleet Expansion

Vietnam Airlines is expanding its fleet in an air-passenger market that the International Air Transport Association estimates will be among the world’s top five fastest-growing in the next 20 years. The government, which has said it will reduce its stake in Vietnam Airlines to 51 percent around 2019 to 2020, from about 86 percent now, is looking to strengthen tourism as a key industry to boost economic growth as the number of foreign visitors surges.

The carrier expects the number of international air passengers to Vietnam to be around 32 million in 2018, a 12 percent increase from this year, Thanh said. The airline forecasts that domestic travelers by air will rise 12 percent next year to 35 million, as economic growth makes travel affordable for more Vietnamese. The government forecasts Vietnam’s growth at 6.5 percent to 6.7 percent next year, among the fastest pace worldwide.

Vietnam Airlines projects its 2018 revenue will jump about 13 percent from this year, while profit before tax may be “at least” 1.6 trillion dong ($70 million), Thanh said in the interview. He predicted that the airline will see about 10 percent passenger growth next year from 22 million in 2017.

Vietnam Airlines has been transforming its fleet with the new widebody planes from Airbus SE and Boeing Co. and to fend off competition from VietJet Aviation Joint Stock Co., the nation’s largest private carrier. Vietnam Airlines signed a deal last year to buy 10 A350 wide-bodied aircraft with a list price of $3.1 billion. It also earlier ordered 19 Boeing Co. 787-9 Dreamliners.

It plans to have 110 aircraft by 2020 and 150 planes by 2030 from 92 planes now, according to Thanh.

The carrier is considering a route to Los Angeles by late 2019 or early 2020, he said. The U.S. Federal Aviation Administration is reviewing Vietnam’s aviation infrastructure to determine if it qualifies for a Category 1 rating, which will enable airlines from the country to fly to the U.S.

Also Read:

Vietnam Airlines eyes public listing, further strategic share sale in two years

Vietnam plans to offload stakes in top aviation firms by up to 30%

Bloomberg

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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.