Vietnam’s $1.8b airport operator ACV plans IPO

Visual from ACV website

The Airports Corporation of Vietnam (ACV), valued at approximately $1.8 billion, is preparing for its initial public offering (IPO) in the second quarter of this year, said the Ministry of Transportation.

The privatisation of the corporation is expected to create big value in the market, not only in term of the value of money but also investment opportunities. This large-sized entity has been monopoly of ground services for Vietnamese airports for years.

Back in September, French airport operator Aeroport de Paris showed its desire to be a strategic partner of ACV, when it implemented the equitization.

As expected, the state will reduce its holding to 75 per cent, while the remaining 25 per cent will be sold to the public.

ACV currently manages 22 domestic airports and is the owner of two major projects, the Long Thanh International Airport (which awaits approval from the Government) and the newly inaugurated T2 terminal of Noi Bai International Airport in the capital city.

Part of the proceeds from the IPO will be used for development of the Long Thanh Airport project’s first phase which is predicted to cost $5.6 billion.

The actual state capital in ACV is nearly $1 billion, which does not include assets in the service zone for flight operations. Meanwhile, the evaluation of ACV excluded an unstated doubtful debt from Financial Leasing Company No 2.

As announced by the corporation, its estimated revenue in 2014 reached nearly $402.3 million, leaving a profit of $59 million.

Last year, two subsidiaries of ACV were equitized, including Southern Airports Services Co Ltd (SASCO) and Saigon Ground Services (SAGS).

In December, investors, both individuals and organizations, had registered to buy more than 40 million shares of SAGS, 15 times higher than its offerings. Concluding the IPO, the lowest purchased price was $2, almost four-folding the reference price.

Shares of SAGS are expected to be traded on the unlisted public companies market (UPCoM) this quarter.

Previously in September, all of 31 million SASCO shares were also consumed in its IPO at the average price of $0.9. Therefore, SASCO, with a charter capital of 61.7 million, sold a 23.65 per cent stake to the public. It is considered as one of the 10 biggest IPOs in the Vietnamese market in 2014.

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