Vietnam: PV Oil extends strategic share offer to 50%, delays June IPO

Photo taken from PV Oil's website.

PetroVietnam Oil (PV Oil), Vietnam’s sole crude oil exporter, has increased the percentage of state divestment to almost 65 per cent, from an earlier fixed limit of 55 per cent.

Accordingly, the parent group, PetroVietnam – representing the state ownership, will hold only 35.1 per cent equity interest in the company after the IPO slated in 2017, according to a PV Oil update on its website.

Under the revised privatization proposal, PV Oil will sell as much as 50 per cent to strategic investors compared to a prior announcement of 49 per cent stake.

Meanwhile, the shares offered to the public will be retained at 15 per cent.

The company did not disclose the strategic investors, but said interested bidders included 10 foreign firms from Japan, South Korea, Russia, Middle East and Southeast Asia, as well as two local investors.

It did not give updates on the number of selected strategic shareholders, but an earlier notice had pointed out the number will not exceed three investors.

PV Oil described the larger offered stake “attractive compared to Petrolimex” – its peer who sold an 8 per cent equity to Japan’s JX Nippon Oil & Energy and currently has a dominating 50 per cent share in the petrol retailing market. PV Oil said it had around 22 per cent share.

Giving up the controlling interest in the company, the local state will still be holding veto power with its 35.1 per cent ownership.

PV Oil said the IPO, earlier expected to take place in June, will be delayed as privatization enactment had not been fully completed.

Bloomberg reported in March that PV Oil expected to raise at least $270 million from selling 40 per cent to one or two strategic investors, a threshold that valued the company at $675 million.

Meanwhile, the latest approved corporate value stands at VND10.34 trillion ($453.5 million). However, strategic investors often pay a bit higher than IPO share prices, as recorded in other IPOs.

As per expansion plan post privatisation, PV Oil plans to raise $280 million for M&A purpose within the next five years to boost its market share to 35 per cent.

The company posted a profit before tax at VND222 billion in the first quarter of 2017, while it made a loss of VND105 billion in the same period in 2016.

This year, energy titan PetroVietnam is also looking to privatize its electricity generation unit PV Power, selling 49 per cent equity through IPO and strategic shares to raise some $600-700 million.

Also read:

Vietnam: PV Oil to dispose 44% stake to strategic investors

Vietnam: Petrolimex shares jump more than 13% on debut

Vietnam’s PV Power eyes $600m from IPO, strategic investors

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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.