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Petrolimex (PLX) might not sell treasury shares to Japanese investor JX Nippon Oil & Energy
Petrolimex might sell treasury shares to Vietnamese portfolio investors instead of Japanese investor JX Nippon Oil & Energy.
Petrolimex might sell treasury shares to Vietnamese portfolio investors instead of Japanese investor JX Nippon Oil & Energy
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Petrolimex (HSX: PLX) recently notified the Ho Chi Minh City Stock Exchange that it will sell another 13 million treasury shares or 1.1 per cent of the outstanding shares between August 27 and September 25. After selling this latest tranche, the remaining treasury shares would be 75 million shares (6.2 per cent of the outstanding shares).
The current treasury share sale represents about nine trading days of stocks so the sale will likely be conducted via the put-through market.
In June, the company's Board of Management confirmed that it would contact the parent company of JX Nippon Oil & Energy Vietnam, a local franchise of Japan-based leading energy corporation, to ask whether they would be interested in purchasing the company’s treasury shares.
However, according to KB Securities, this current tranche of treasury shares will be sold to local portfolio investors instead of the Japanese strategic partner, which would not impact the 9.0 per cent free float.
This free float at Petrolimex is below the 10.0 per cent requirement for inclusion in the VN30 Index but remains a member of the index due to the free-float adjusted market capitalisation rule.
Notably, the largest oil and gas stock in the VN30 Index is PV Gas (HSX: GAS) which maintain only 5 per cent free float.
Although the Petrolimex Board of Management prefers selling a portion of its remaining 6.2 per cent treasury shares to strategic investors, any additional sell-downs should not put Petrolimex’s stocks at risk of being dropped from the VN30 Index.
This, however, highlight the low free floats of Vietnam’s oil and gas stocks due to delayed privatisation.
In general, experts still believed Petrolimex 12-month target price would benefit thanks to growth in retail energy demand, expansion of more profitable directly-owned gas stations, and greater use of convenience stores to boost revenue from the gas station network.
VIR
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