Binh Son refining company to open Vietnam’s largest IPO in January
Binh Son Refining and Petrochemical Co Ltd (BSR), the operator of Dung Quat Refinery, will conduct Vietnam’s biggest-ever initial public offering (IPO) on January 17 next year, hoping to garner about VND4 trillion (US$157.4 million) for State coffers.
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Under the equitisation plan approved by Prime Minister Nguyen Xuan Phuc on December 8, BSR will sell nearly 241.6 million shares, equivalent to 7.79% of its charter capital, to the public at an initial price of VND14,600 per share (US$0.64).
At this price, BSR is valued at US$2 billion, making it the largest firm ever to hold an IPO.
PetroVietnam will retain 43% of BSR’s charter capital while a maximum of 49% will be sold to strategic investors in three months after the IPO. About 0.21% of shares will be offered to the company’s employees.
After sending a letter of invitation to purchase shares to interested investors, BSR has worked directly with 17 funds and five partners, which are large corporations and want to become BSR’s strategic shareholders.
Two foreign petrochemical companies – World Petro (United States) and MacronPetro Petroleum (Africa) – have expressed interest in buying a 49% stake.
Other international oil companies including Repsol (Spain), representatives of ASEAN Council on Petroleum (ASCOPE) such as PetroleumBRUNEI, Indonesia’ Pertamina and Singapore’s SRC have also visited the company to explore the investment opportunity.
In addition, another State-owned company, Vietnam National Petroleum Group (Petrolimex), also expressed its intention to buy BSR’s shares after the two parties signed the cooperation agreement in August this year.
BSR chairman Nguyen Hoai Giang said the two companies had considered entering a strategic co-operation in the near future but they and Petrolimex’s foreign partner JX Nippon Oil & Energy would have to sit and discuss issues including the size of share purchase and other specific conditions.
Strategic investors in BSR must have a minimum charter capital of VND10 trillion and be profitable during the most recent years with no aggregated loss. Priority would be given to investors with experience in operating refineries and oil distribution to support BSR’s oil refinery plant after its privatisation.
The Dung Quat refinery operator reported total revenues of VND71.9 trillion (US$3.15 billion) in the first 11 months of this year, up 15.8% over the yearly plan. It contributed VND9.06 trillion to the State budget, 26.3% over the yearly goal.
Its profit is expected to top VND8 trillion (US$351 million) by year-end with the return on equity (ROE) ratio reaching 25-26%.
The company will hold two road shows to provide detailed information to investors, one in HCM City on December 20 and another in Hanoi on January 5.
