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National carrier refueling IPO plans
Vietnam Airlines is developing a timeline for its much-delayed domestic initial public offering and overseas strategic offers, expected to be finalised in the next two months.
If all goes well, the stock market debut could come in early 2014. A source familiar with the national flag carriers’ IPO progress last week told VIR that currently four advisers are to be in process of due diligence to deliver a report of overall evaluation of the current situation for the offers which would take within three months to be finished. The source said that the national flag carrier was moving the process as fast as possible.
“It is expected the timeline for IPO would be given to discuss at the meeting of advisers in June. Some key contents related to the offers including setting up prospectus and other necessary documents for IPO could be disscused,” said the source.
As expected, preparation of IPO documents, including corporate valuation process will take six months and then the timeline with IPO documents will be officially proposed to the management authority for approval in the last quarter of this year.
In mid April, Vietnam Airlines signed the advisory contract with four advisers which include the joint venture contractors of Citigroup and Morgan Stanley, BIDV Securities and VietnamValuation and Finance Consultancy Joint Stock Company.
Vietnam Airlines declined to comment on the information related to the IPO progress while Morgan Stanley did not respond to VIR's enquiry. The airline, which now controls 69.7 per cent of the domestic market, has delayed its IPO for several years due to economic difficulties and the gloomy stock market. In December 2012, Vietnam Airlines submitted to the Ministry of Transport (MoT) a plan of conducting IPO in 2013. Accordingly, the national carrier will sell a 20-30 per cent stake to the public and it will issue additional shares.
Vietnam Airlines expected to raise some $200 million via IPO, as the state giant evaluates its equity to reach VND14 trillion ($673 million) in 2013 and VND21 trillion ($1 billion) in 2015
After its IPO, the state will decrease its stakes in the airlines to 65-75 per cent of its charter capital, which is now at VND8.94 trillion ($429.8 million), according to the Vietnam Airlines’ restructuring plan for 2012-2015.
In 2012, Vietnam Airlines’ total annual revenue reached VND511 trillion ($2.4 billion), surging 6.3 per cent. The airline also saw profits of VND69.8 billion ($3.3 million), up 239 per cent year on year.
By late 2015, Vietnam Airlines is expected to completely divest its capital from non-core businesses with a view to improving its business performance.
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