Vinalines IPO falls sharply short of target

Vinalines’s IPO fell short of its target of selling a 34.8% stake for $210m, raising just $2.33m (VDN 54.35 Billion) on Hanoi Stock Exchange Wednesday.

The auction attracted 42 investors, including 40 individual investors and two organisations, said local media. The highest bid value reached $0.56 per share (VND13,000). 

Under the initial plan, Vinalines planned to offer 207m shares or 14.8% of the company to strategic investors. The remaining shares were to be sold to employees of the company.

Weeks before, several investors had expressed interest, including SK Holdings, South Korea’s third-largest multilateral business conglomerate, but those intentions did not materialise. The State still holds 65% stake, equivalent to 912.9m shares, in Vinalines after the IPO. 

It will also boost divestment of capital in its 18 member enterprises. According to Vietnamese media, Vinalines Chairman of the board Le Anh Son said that “We will withdraw all our capital from nine businesses that have suffered losses, only keep dominant shares at nine businesses operating efficiently and profitably in our chain operations.”  

Some companies within the Vinalines conglomerate have continuously recorded losses such as Vietnam Ocean Shipping Joint Stock Company, Vietnam Sea Transport and Chartering Joint Stock Company, Cai Lan Port Investment Joint Stock Company, and Vinalines will soon plan to divest all capital. It will also divest from other loss-making businesses, including listed companies. 

Vinalines is a major player in shipping, seaport and maritime services with a fleet of 84 vessels totalling 1.8m dwt, but its business activities have continuously recorded losses since 2008. In 2017, the core sector of Vinalines recorded a loss of $26.9m. In the first six months, Vinalines posted $283.8m in total revenue and $3.13m in pre-tax profit.

Posted 06 September 2018

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Michele Labrut

Americas Correspondent, Seatrade Maritime News

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