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PV Power to offer 29% to strategic partners

Released at: 15:11, 15/08/2017

PV Power to offer 29% to strategic partners

Source: news.zing.vn

IPO slated for December, with a lower offering for strategic partners than previously planned.

by Quang Huy

The PetroVietnam Power Corp. (PV Power), the country’s second-largest power supplier behind Electricity of Vietnam (EVN), has trimmed the stake to be offered to strategic investors in its initial public offering (IPO) to 29 per cent, which is expected to be carried out in December.

It was reported in April that PV Power would conduct its IPO in August and sell 45 per cent to strategic investors before the end of the year. The company has now said it will offer 20 per cent to the public and employees, or five times the amount in the previous plan, when it expected to fetch between $600 million and $700 million overall from the sale.

Officials at PV Power were not available for comment at the time of writing about the changes to its IPO and the stake sale to strategic partners.

The Ho Chi Minh City Securities Corp. (HSC) wrote in a recent report that the increase in the amount of the public offering may stem from rising demand for financial investment in the recent IPOs of VPBank and Viglacera, which saw significant over-subscription. “The risk of failing with an IPO is low, because unsold shares, if there are any, will be then offered to other investors,” HSC noted.

VinaCapital, BNP Paribas, Standard Chartered, Deloitte, Indochina Capital, Dragon Capital, Sembcor, and GIC count among the strategic investors PV Power has been actively courting.

Within five years of equitizing, PV Power targets supplying 200 billion kWh to the national power grid and earning annual revenue of VND40 trillion ($1.76 billion). It will also invest in the Nhon Trach 3 and 4 thermal power plants and take over projects from its parent company, the Vietnam National Oil and Gas Group (PetroVietnam).

Established in 2007, PV Power produces and sells electricity, repairs and maintains power plants, provides equipment and spare parts, imports and sells coal to power plants, and develops power projects.

It has registered capital of VND21.77 trillion ($959 million) and owner’s equity of $1.48 billion. It was valued at $2.67 billion as at December 31, 2015.

It currently manages and operates four gas-fired power plants, three hydropower plants, and one coal-fired thermal power plant, with a total designed capacity of 4,208 MW. The company's equitization is set to attract domestic and foreign investors and improve its financial capacity, allowing it to apply new technology and improve its governance to boost efficiency and competitiveness.

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.

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