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Vietjet Air poised to hold IPO
VietNamNet Bridge – Vietnam’s first private airline plans to choose Hong Kong or Singapore as the city to hold its initial public offering (IPO).
According to Vnexpress, Vietjet Air plans to conduct an IPO in 2015. It is currently selecting a consultant to help with the process.
In an interview with the Wall Street Journal, Vietjet CEO Luu Duc Khanh said the company expected to gain $800 million through the IPO. However, he did not disclose further details.
Speaking to Bloomberg earlier, Khanh said VietJet would hold an IPO after it gained a profit, and the airline would choose Hong Kong or Singapore.
The proceeds from the IPO will be used to pay for new aircraft. With 20 Airbus A320s at present, Vietjet is scheduled to receive an additional six to 10 aircraft per year in the future, under a contract to purchase 63 aircraft from Airbus, at a cost of about $6 billion.
VietJet has opened air routes to 13 domestic points and five abroad. The company plans to open more international routes to China, Japan and Taiwan this year.
Asia is witnessing many IPOs of airlines. Last October, Bangkok Airways held an IPO and grossed $402 million. In November 2014, Vietnam Airlines sold 3.48% of its shares in an IPO, earning nearly $52 million. Some others are also considering an IPO, including Indonesia Air Asia and Lion Air.
Asia continues to be a hot aviation market. In the past five years, the number of passengers increased by two-thirds to over a billion people in Asia. To serve the needs, Asian airlines are major customers of aircraft manufacturers like Boeing and Airbus.
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