Power provider plans to sell 45% stake to strategic investors by end of year.
The PetroVietnam Power Corp. (PV Power), the country’s second-largest power supplier behind Electricity of Vietnam (EVN), will carry out an initial public offering (IPO) in August and sell 45 per cent of its shares to strategic investors before the end of the year.
Some 3 or 4 per cent will be offered to the public in late August while the sale to strategic investors may be as much as 60 per cent of charter capital, depending on government approval, and will be completed before the year wraps up.
VinaCapital, BNP Paribas, Standard Chartered, Deloitte, Indochina Capital, and Dragon Capital count among the strategic investors PV Power has been actively courting.
People familiar with the process said the strategic stake sale could fetch as much as $700 million and that the proceeds would be used to fund more power projects around the country.
PV Power targets electricity output of 4,208 MW in 2017 and 10,650 MW in 2026, an increase of 153 per cent. It will divest from its hydro-power plants and focus on fossil fuel and coal-fired investments. It expects fossil fuels to supply 89 per cent of its total capacity by 2026.
A unit of the country’s largest State-owned oil and gas company, PetroVietnam, PV Power has targeted revenue of VND29 trillion ($1.29 billion) for 2017, a year-on-year increase of 9.3 per cent. Its electricity output was 21.2 billion kWh last year, accounting for 12 per cent of the country’s total.
Vietnam is putting more of its State-owned enterprises up for sale as it looks to attract foreign investors. Just last month, PV Oil, another subsidiary of PetroVietnam and the country’s monopoly crude oil provider, was reported to be in talks to sell a holding of as much as 40 per cent to strategic investors.
It expects to raise at least $270 million from the sale to one or two investors, President and CEO Cao Hoai Duong was reported by foreign media as saying. Ten potential strategic investors, including “major oil companies” from Japan, South Korea, Thailand, the Middle East, and Vietnam have applied to buy the shares, according to Mr. Duong.
PV Oil will also offer as much as 15 per cent of its shares in an IPO in the first half this year, he said, adding that the stake sale to strategic investors will occur at the same time as or after the IPO. The company will list its shares at an undetermined time on the Ho Chi Minh Stock Exchange (HoSE) after the IPO.
PV Oil, which derives 75 per cent of its revenue from oil distribution, is aiming to triple its nationwide gas station network to 1,550 outlets by 2022, Mr. Duong said. It still has potential to grow, he went on, referring to the government’s market share cap of 50 per cent for petroleum distributors. “We are big enough to buy smaller competitors to expand our market share,” he explained.