Strategic investors may be discounted
The government may change the way it handles initial public offerings (IPOs) after criticism of past sales, the nation’s stock-market regulator said.
Under the proposed new process, so-called “strategic investors” may be offered a discount in future IPOs, the State Securities Commission said.
The current share-sale strategy is “flawed,” with the government too ambitious in trying to maximize the amount raised, HSBC Holdings Plc. said last month.
The initial sale of Saigon Beer-Alcohol-Beverages Corp. in January was “largely considered a failure” after the government received bids for only 61 percent of the shares available, DWS Vietnam Fund Ltd. said.
The strategy, known as equitization, is designed to include the choice of a strategic investor via a private share placement, as well as a share auction, according to DWS Vietnam.
A potential strategic investor that joins the process at an early stage may pay less than others, through a private placement, said State Securities Commission Deputy Chairman Nguyen Doan Hung.
“There are strong voices criticizing the equitization process,” Hung said Thursday.
“The floor prices have been very high. There are strong voices saying in the evaluation of companies, the participation of strategic partners should be considered more.
They could join in the evaluation and maybe in the setting of the price.”
The “fully priced auctions of state-owned enterprises have contributed to the recent poor performance of the Ho Chi Minh Stock Exchange’s VNIndex,” DWS Vietnam said in a note sent this week.
Hanoi Beer-Alcohol-Beverages’ March 27 auction is the next in a series of initial offerings of the country’s large state-owned companies.
Incombank, BIDV
Other share sales expected this year include: the Industrial & Commercial Bank of Vietnam, known as Incombank, the Bank for Investment & Development of Vietnam, known as BIDV, and mobile-phone operators Vinaphone Telecommunication Services Co. and Vietnam Mobile Telecommunication Services Co., according to DWS Vietnam.
“I had a talk with the general manager of Incombank, and he is very confident that the bank will be equitized this year,’’ Hung said.
“For BIDV, I don’t know.”
While the government has decided to delay its previous timetable of IPOs in an attempt to avoid a glut of shares on the market, it is still committed to the process as part of an attempt to improve corporate efficiency, Hung said.
“We welcome the authorities’ intention to press ahead with the broader economic reform agenda, including state-owned enterprise equitization,” the International Monetary Fund said last week.
“This will continue to strengthen the structural reform story that has made Vietnam such an attractive investment destination.”
Thanhnien
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