Saigon Port, the busiest container port in Vietnam, has got the go ahead for its initial public offering (IPO) that is slated to take place on June 30, and is expected to raise a trillion in Vietnamese dong.
Under the announced IPO plan, a selected strategic partner will purchase 20 to 25 per cent of the southern port operator, while the state will hold at least 51 per cent of the company’s charter capital after the privatisation.
This implies that Vingroup – the country’s leading property developer – which had said it wants to buy up to 80 per cent of Saigon Port, will not be able to fulfill its ambitions. Meanwhile, the executives with the Saigon port have not revealed its strategic partner.
Saigon Port’s IPO has been long anticipated by investors seeking to own part of one of the country’s largest ports. The IPO is expected to perform much better than the previous share auctions of other ports.
Learning from the IPO failure of other big ports such as Hai Phong, Da Nang and Quang Ninh, which managed to sell less than 50 per cent of the offered shares, the government has agreed to adjust the state holding from an earlier plan of 75 per cent to 51 per cent, in order to attract more investors.
The port’s assets are valued at almost VND4 trillion ($186 million), in which the land use rights account for as much as VND246 billion.
It directly operates and has interests in the local key seaports, like the Nha Rong Khanh Hoi, Tan Thuan, Saigon – Hiep Phuoc and Cai Mep – Thi Vai.
“The location and size of the ports are two critical elements to profit growth of a port operator, and Saigon Port possesses both,” said Dinh Thi Thu Thao, analyst for VietCapital Securities Company.
She pointed out that these will be attractive to prospective investors during the upcoming IPO.
Meanwhile, if Saigon Port, based in Ho Chi Minh City, successfully sells 49 per cent stake to outside investors, its parent firm – the Vietnam National Shipping Lines (Vinalines) – will collect trillions of dong (one US dollar equals VND21,600) and have the resource to partially repay its creditors.
The total liabilities of Vinalines, according to the Debt and Asset Trading Corporation (DATC), stand at more than VND12 trillion.
However, the debt restructuring talks of the state giant have come to a standstill, as its creditors, mostly banks, did not accept the non-performing loan purchasing price offered by the DATC, stating that it was too low.