Vietnam Rubber Group targets raising $273m in Feb IPO

State-owned Vietnam Rubber Group (VRG) will offer 475.1 million shares, equivalent to nearly 25 per cent of its charter capital, for sale in its initial public offering (IPO) scheduled for February. With the starting price set at $0.59 apiece, VRG expects to raise nearly VND6.2 trillion ($273.1 million) from the share sale.

Under the equitization plan, VRG has a charter capital of VND40 trillion ($1.76 billion), equivalent to 4 billion shares. Of this, the government will retain a 75 per cent stake. The Ministry of Agriculture and Rural Development (MARD) will act as the state’s representative in the sale.

Of the remainder, more than 475 million shares, or 11.8 per cent of charter capital, will be sold through a public auction, while another 11.8 per cent will be sold exclusively to domestic strategic partners. Some 1.22 per cent, or nearly 49 million shares, will be sold to current employees and 0.02 per cent to members of VRG’s trade union.

VRG’s IPO will be similar in size to that of PetroVietnam Power Corporation (PV Power) to be conducted later this month.

PV Power will offload more than 468.3 million shares, equivalent to 20 per cent of its charter capital, at a starting price of VND14,400 ($0.64) per share. The power firm expects to raise at least VND6.74 trillion ($296.5 million) from the IPO.

Compared to the Sabeco auction held in December 2017 that saw the state offload a nearly 54 per cent stake, VRG’s IPO will see a smaller 25 per cent divestment by the government.

It is worth noting that VRG can only sell shares to domestic investors, not foreign investors. Strategic investors are not allowed to transfer shares for a period of five years.

“There are many reasons not to sell VRG’s shares to foreign investors, but the main reason is because of important position of land that this group holds,” Deputy Minister of Vietnam’s Agriculture and Rural Development Ha Cong Tuan was quoted as saying, adding that the 420,000 hectare of land VRG has in Vietnam, Laos, and Cambodia could be a huge advantage and highly profitable in the future.

The rubber firm’s net revenue in the first nine months of 2017 stood at VND354.4 billion ($15.6 million), up 83 per cent year-on-year. After-tax profit of the group stood at VND708.8 billion ($31.2 million), up 2.3-fold compared to the same period of 2016.

Earlier, in November 2017, Vietnam’s government approved VRG’s five-year production and business plan for 2016-2020. It targets achieving average annual growth of 18 per cent during the period, with total revenue surpassing VND40 trillion ($1.76 billion) and profit of around VND9 trillion ($409 million) by 2020.

As part of its multi-sector investment strategy, VRG also focuses on hydropower, cement, construction and banking sectors.

Also Read: 

Vietnam rubber major VHG acquires 18% in SRC

Taiwan’s Kenda Rubber to invest $160m in building second tyre plant in Vietnam

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.

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.