Vietnam state coffee firm Vinacafe plans 35% stake sale via IPO

The Vietnam National Coffee Corporation, the producer of Vinacafe-brand of products, is mulling an initial public offering by next year as the local government looks to re-organise the agriculture major.

The company plans to sell a 35 per cent stake either later this year or early next year, according to Reuters.

The company’s chairman was cited as saying that the timing of the IPO will depend on how fast the government approves its detailed privatisation plan and valuation, which is slated to be completed by June this year.

Meanwhile, Bloomberg reported that Vinacafe along with 18 subsidiaries will become joint stock companies following the IPO, with the valuing process commencing in July.

Vietnam, the world’s second largest coffee exporter, had earlier determined to privatise Vinacafe by 2017, including stake sell-offs by as much as 49 per cent in the firm’s seven units. The decision also included disinvestments in 18 subsidiaries in which Vinacafe will hold 51 per cent each.

Vinacafe had also been directed to divest from its most successfully privatised unit, Vinacafe Bien Hoa. In December 2015, the parent firm sold its last 12.85 per cent interest.

VinaCapital was a private equity investor in Vinacafe Bien Hoa from 2004 to 2010 when the fund manager exited to Masan Group. Masan Beverage, a unit of Masan Group, currently owns 68.5 per cent of Vinacafe Bien Hoa after aggressive purchases over the past few years.

Hillhouse Capital’s Gaoling Fund is the second largest shareholder in the coffee producer with more than 23 per cent ownership.

A listed equity on the Ho Chi Minh City Stock Exchange since 2011, Vinacafe Bien Hoa has been one of the most sustainably growing stocks, recently reaching the price of VND170,000 ($7.4) apiece.

Meanwhile, the parent group reportedly said its revenue this year will potentially jump 33-50 per cent over 2016 to the region of VND4-4.5 trillion ($175-197 million).

Also read:

Vietnam 2016: Privatisation of state firms continues to be piece-meal process

Vietnam to see big PE play if state offers major stake in privatisation: Don Lam, VinaCapital

Vietnam Opportunity Fund will continue to look at privatised state companies: VinaCapital