Vietnam’s state-owned Vietnam National Shipping Lines (Vinalines) will be reducing stake in several major ports, including the historic Saigaon Port. The company hopes to raise VN 2 trillion (about $93.5 million), through the proposed plan to equitise its ports.
According to the official statement, the government officials have just passed a decree to reduce ownership in several major ports along the Vietnam coastal line. In particular, the State plans to reduce it’s holding in the Saigon Port (the twenty fifth largest port in the world), from the existing 75 per cent to 50-60 per cent.
The company is said to be looking for three strategic partners, for the equity made available through dilution of the state’s stake.
Saigon Port is worth approximately VND 3,955 billion ($187 million); the state’s shareholding is the port is valued at VND 2,162 billion ($98.2 million).
According to the Vinalines financial statements, the revenues from IPOs of its group companies (which went public during the first three quarters of 2014) have not been in line with expectations. The four of the largest ports – Hai Phong, Quang Ninh, Nha Trang and Da Nang – sold for less than five per cent of the total shares issued; the divestment target was about five times larger.
According to Le Anh Son, CEO, Vinalines, this was mainly because the State continues to hold a majority stake in these ports (about 75 per cent). The continuing government ownership, made the ports unattractive to investors, the CEO said while addressing a press conference.
Vinalines has completely exited CaiLan International Container Terminal Company (CICT) where it held about 57 per cent equity stake, which was sold for VND 206 billion.
All the divestments are part of the planned financial restructuring of Vinalines. According to the company website, it will divest in 23 subsidiaries and 22 associated members of the group before the end of 2015. “Vinalines is expecting to earn more than VND 2 trillion from the divestment, which are being carried out to offer financial reform and improve management efficiency of the ports,” said Le Anh Son.