|
SCIC proposes raising foreign ownership in Jetstar Pacific to 49%
State Capital Investment Corp. (SCIC) is looking to increase foreign ownership in Jetstar Pacific Airlines as a measure to help the debt-ridden budget carrier ride out the doldrums.
In its recent document submitted to relevant agencies, SCIC proposed increasing the foreign stake to a maximum of 49% in Jetstar Pacific which racked up losses of about US$20 million in the first nine months of this year due mainly to the previous high fuel costs.
Government Decree 76/2007/ ND-CP dated May 9, 2007 provides a 30% stake of the charter capital of a Vietnamese airline for a single foreign investor and 49% for all foreign investors. But SCIC wants more Jetstar Pacific shares to be exclusively sold to either Qantas or other foreign investors recommended by the Australian aviation firm.
Qantas now holds an 18% stake worth US$30 million in Jetstar Pacific and will bring the percentage to 30% by 2010 under a US$50-million agreement signed between SCIC and its Australian strategic partner in Hanoi in April last year.
SCIC now holds 75.78% in Jetstar Pacific, which was known as Pacific Airlines before May this year when the airline completed its transformation. The airline now uses the Jetstar brand for its domestic and international flights under a strategic and commercial partnership with the Qantas Group' airline Jetstar.
However, the State holding represented by SCIC in Jetstar Pacific will go down in the coming years as the corporation is seeking Government approval to divest the State capital in the carrier by selling shares to local and foreign investors.
The corporation said its long-term plan would be to hold a 25-35% stake in Jetstar Pacific, which is now Vietnam's second airline after the national flag air carrier Vietnam Airlines.
The plan is in line with the suggestion of both the Finance Ministry and the Standing Committee of the National Assembly at a meeting on equitizing State-owned enterprises in August that the SCIC should maintain State stakes in around 100 enterprises deemed most efficient, and divest State capital from hundreds of others.
In October, SCIC unveiled its plans to divest State capital in 144 enterprises with total book value of VND344 billion (over US$20.3 million) in the fourth quarter this year. The aim is to restructure portfolios managed by the corporation, to streamline its business scopes, to ensure long-term investment of the State, and help the companies develop stably when attracting foreign capital.
As for Jetstar Pacific, SCIC proposed in the document increasing the stake of Saigontourist Holding Company in the airline from the current 6.18% to 13%, or selling stakes to other financially strong domestic firms able to support the carrier's business development, with priority for State-owned enterprises.
Saigontourist held a 13% stake in Pacific Airlines before Jetstar Pacific was restructured into a low-cost air carrier in mid-February 2007.
A 5% stake of the carrier is also suggested for employees as away to retain them in a time when there is a serious shortage of trained people for Vietnam's aviation industry.
SCIC, a Government arm mandated to hold State shares in State-turned-shareholding enterprises, said in the document that Jetstar Pacific would need a capital injection of at least US$30 million for next year.
Part of the fresh investment is planned to fuel new aircraft to expand services in the domestic market and reach out to regional markets. Previously, the airline envisaged to have 14 planes next year but has to scale down the aircraft number to eight to 10, with five to six of which for domestic flights and the rest for international services.
SCIC also proposes the Civil Aviation Administration of Vietnam (CAAV) to allow Jetstar Pacific to extend the period to wet-lease planes until four years instead of two years at the moment to make it easier for its aircraft leasing. However, this proposal is quite different from many airlines' current tendency to dry-lease planes to cut costs.
SGT
|
