The national flag carrier Vietnam Airlines (VNA) has received the application from two foreign strategic investors, said a senior official at a recent marketing event for the coming initial public offering (IPO) of VNA.
The process of seeking strategic investors is still being deployed, and as many investors are really interested in the company, VNA will continue receiving applications from investors, said Pham Viet Thanh, chairman of the VNA Board, at a conference introducing investment opportunities in VNA in Ho Chi Minh City on Thursday.
According to the IPO roadmap of VNA, it will offer 282 million shares, equivalent to 20 percent of its charter capital, for foreign strategic partners and/or foreign financial investors.
“We will continue to receive registrations from foreign investors, but the number of strategic investors shall not exceed three. Vietnam Airlines prefers strategic partners like a corporation or an airline,” Thanh said.
VNA will have a different set of standards for a specific group when choosing strategic investors or partner. For foreign airlines, what are considered important and to be prioritized by VNA for the final selection are governance capabilities and business capabilities, he added.
As for financial investors, the company will pay attention to financial capacity and long-term investment commitment.
In addition, strategic investors investing in Vietnam Airlines must have an equity and total minimum assets equivalent to at least US$4 billion in the year preceding the year of registration as a strategic shareholder.
Moreover, they also have to pledge not to transfer shares acquired for at least 5 years, Thanh added.
Currently, in the ownership structure after equitization of VNA, the state holds 75 percent (1.057 billion shares), followed by 282 million shares sold to strategic investors (20 percent), 49 million shares sold at the coming public auction (3.475 percent), 20.8 million shares sold at preferential prices to employees (1.475 percent), and over 705,000 shares at preference price for the VNA trade union (0.05 percent).
With the dominating role of the state, many investors at the conference asked for an adjustment in the future.
However, Pham Viet Muon, Chairman of the Government Office, Deputy Chief of the State Standing Steering Committee for Innovation and Development of State Enterprises, said the 75 percent stake held by the state is a reasonable rate, as it is appropriate with the current economic context and the ability to absorb capitals of the Vietnamese market.
In the years after the IPO, if the business operations of VNA run well, the Ministry of Transport, the representative of the state ownership at VNA, will decide to pull down the stake there, but not less than 65 percent.
Along with equitization, Vietnam Airlines aims to become a 4-star airline in the year 2015-2016.
The company also plans to install wireless connection on the plane, and start to transform from using current widebody aircraft to deploying a new generation of aircraft including Boeing 787-9 and Airbus A350-900.
According to the financial report for 2008-2013 of Vietnam Airlines, the average revenue growth was at 15.8 percent annually, while the average gross profit rate amounted to 10.66 percent.
VNA’s total revenue reached VND45.4 billion ($2.14 million), up 5 percent compared to 2012. At the same time, Vietnam Airlines accounted for 51.8 percent share of total passenger transport network. Of these, 63.2 percent are domestic visitors and 40.6 percent international visitors. In terms of revenue, the international segment contributed to 66 percent its total revenue. About the fleet, by the end of 2013, the company has 83 aircraft with many different lines. The company also owns more than 400 slots in 29 destinations at international airports. Vietnam Airlines holds a total asset value, which is determined by its book value, of more than VND57 trillion, of which the value of aircraft assets was at VND32.6 trillion. Its total equity was at over VND10 trillion. After launching the IPO on November 14 at a starting price of VND22,300 per share, Vietnam Airlines will begin to sell shares to its employees and unions from November 15 to December 19, 2014. On November 24, Vietnam Airlines will develop and apply specific criteria for approval of selection of strategic investors. On December 8, 2014, Vietnam Airlines will conduct selection of potential strategic investors in round 2. On February 16, 2015 the most important strategic shareholders will be selected, and VNA will continue other procedures to reach the final contract to sell shares to these strategic shareholders. |
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