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Vinalines to launch IPO in December

Released at: 10:50, 28/04/2017

Vinalines to launch IPO in December

Photo: Archives

Plans presented at maritime exhibition in Singapore, with Vinalines seeking strategic investors.

by Duy Anh

Vietnam National Shipping Lines (Vinalines) is seeking strategic investors as it plans to conduct an initial public offering (IPO) in December this year, the company said in a statement on its website.

On the sidelines of a regional maritime exhibition in Singapore on April 26, Vinalines held a conference to present the IPO plan to investors, saying it saw Singaporean companies as potential partners.

According to the plan, the government will retain a 65 per cent stake in the shipping company, offering 17.25 per cent to strategic investors and the same proportion to the public.

It did not say how much it hoped to raise from the IPO, but said the offering would have registered capital of $550 million. The stake sale is part of the government’s drive to cut stakes in State-owned enterprises (SOEs), many of which have low profitability. But progress has been slow due to the small stakes being offered to investors.

Post-IPO, Vinalines will increase its registered capital to VND12.3 trillion ($500 million) from the current VND10.69 trillion ($470.25 million). Financial statements show that Vinalines is gradually recovering from its debt crisis in 2012 and the arrest of many of its executives on fraud charges.

It posted a consolidated loss of VND180.8 billion ($8 million) in 2015, compared to a whopping $116.6 million a year earlier. It reported breaking-even last year, although its revenue fell 10 per cent to $705.4 million.

Vinalines has targeted revenue of VND12.4 trillion ($545.44 million) this year, down 22 per cent compared to last year. The global shipping industry remains in its worst slump on record, as international trade slows and freight rates fall in a market flooded with too many vessels. Vinalines aims to earn a consolidated profit of $75.8 million on revenue of $757.7 million by 2020.

The shipping company once symbolized the post-war promise of Vietnam when it began jockeying for global trade after the US lifted sanctions on Vietnam in 1994. But in 2012 it battled through a major $2.1 billion debt crisis and the arrest of many of its senior executives.

The government has taken cautious measures to quicken the equitization process, including forcing public companies to list shares on the local stock exchanges.

Vinalines’ IPO was due to be launched in the first quarter of 2015. The firm proposed removing five ships - Vinalines Global, Vinalines Ocean, Vinalines Sky, Vinalines Trader, and Vinalines Ruby - from the list of assets subject to corporate evaluation. The suggestion was turned down.

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