Petrolimex to sell 8% stake to Japan firm

Hosting the shareholders’ meeting in Hanoi last week, Petrolimex Chairman Bui Ngoc Bao revealed the plan to issue more shares to increase the group’s charter capital. The deal with JX was the first phase of this plan.

The price will not be lower than VND38,000 (US$1.7) per share. With this price, the company is expected to collect at least VND3.9 trillion (US$175 million), Bao said.

After the purchase, JX will receive more than 155 million preferential shares, where the shareholders do not have voting rights.

Bao said the deal with JX had been under negotiation for nearly two years. It had planned to sell 20% of its stake to JX at first, but the figure was reduced to eight% due to existing difficulties in the market.

The capital earned after the sale will be partially used to restructure the finances of Petrolimex Singapore Pte Ltd in Singapore, which is reeling under losses of trillions of dong.

Chairman Bao said they would send the restructuring plan of Petrolimex Singapore to relevant ministries and to the Prime Minister in order to create a plan that best serves the group and its sharesholders.

Earlier, Deputy Prime Minister Vu Van Ninh had approved the Ministry of Industry and Trade’s plan to issue more shares and increase Petrolimex’s charter capital.

The measure is considered part of the restructuring process of the group whose current charter capital is VND10.7 trillion (US$475.5 million).

As of December 31, 2015, Petrolimex’s total assets reached VND51 trillion. The company earned VND146 trillion in revenue and VND3.76 trillion in pre-tax profit.