The Vietnamese government has raised VND1.16 trillion ($51 million) from selling a 23 per cent stake in Vietnam Southern Food Corporation (Vinafood 2) in its initial public offering (IPO) in Ho Chi Minh City Stock Exchange on March 14.
The auction attracted 41 investors, including 40 individual investors and one organization, to buy 114.83 million shares on the offer for sale. The highest bid value reached VND12,000 ($0.53) per share. The proceeds were in line with the government’s expectation.
The sale of Vinafood 2 is part of Vietnam’s broader privatization programme. Under the equitization plan approved by Vietnam’s Prime Minister, Vinafood 2 will sell another 25 per cent to strategic investors.
Vietnam-based multi-sector firm T&T Group was earlier reported to have acquired a 25 per cent strategic stake in IPO-bound Vinafood 2. With the price for the strategic stake sale expected to at least match the IPO starting price of VND10,100 ($0.45) per share, T&T Group may have had to pay at least VND1.26 trillion ($56 million) to purchase the 25 per cent stake.
In a previous statement, Vinafood 2 said T&T Group was the only company to submit a bid to become a strategic investor so far. The interest in acquiring a Vinafood 2 stake comes as T&T Group plans to expand its presence in the agricultural sector.
Vinafood 2 specializes in processing and trading food, importing and exporting agricultural products, and storage. The company currently owns the distribution system throughout the southern provinces of Vietnam.
The agriculture firm is targeting VND11.89 trillion ($523.1 million) net revenue and VND118 billion ($5.19 million) after-tax profit in the first year after equitization.
Its net revenue in 2016 stood at VND9.95 trillion ($437.8 million), down 36 per cent year-on-year. By the end of 2016, the company recorded a net loss of VND798 billion ($35.1 million). By mid-2017, the accumulated loss had increased to VND912 billion ($40.1 million).