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.