Feb 05, 2018 / 16:33

Vietnam to sell shares of major rice exporter Vinafood 2 in March

Vietnam will sell state stake in the Southern Food Corporation (Vinafood 2) through an initial public offering (IPO) on March 14.

The Ho Chi Minh Stock Exchange (HoSE) announced that specific information on the IPO of the country’s main rice exporter will be officially released on February 7.
Under the equitisation plan signed by Deputy Prime Minister Vuong Dinh Hue recently, Vinafood 2 will sell 114.8 million shares, equal to nearly 23% of its charter capital. Shares of the rice exporter would be sold at an initial price of VND10,100 (US$0.44) per share, valuing the company at US$222.4 million.
 
Vinafood 2 will sell 114.8 million shares, or 23% of its charter capital
Vinafood 2 will sell 114.8 million shares, or 23% of its charter capital
Another five million shares of Vinafood 2 will be sold to its employees, equivalent to 0.99% of charter capital. The stake sold to the trade union organization at the corporation is 200,000 shares, representing 0.04% of the charter capital.
Strategic investors will be also able to purchase 125 million shares, representing a quarter of Vinafood 2’s charter capital.
According to Vinafood’s invitation to investors, strategic investors must have total assets of at least VND10 trillion, minimum charter capital of VND3.5 trillion and record positive after-tax profit in three consecutive years with no accumulated losses by the end of 2015.
Strategic investors must also commit to co-operate with the corporation in implementing agricultural restructuring, linking with farmers to form a value chain in rice production and export.
Vinafood 2 specializes in processing and trading food, importing and exporting agricultural products, and storage. The company currently owns the distribution system throughout the southern provinces of Vietnam.
In a recent interview with media, Deputy PM Hue said that Vietnam is dramatically accelerating sales of stakes in state-owned enterprises (SOEs). Hue announced that the country this year plans to sell 6.5 times more shares than it offered last year. Under the plan, Vinafood 2 is among 245 SoEs that will be up for sales in 2018. 
“We need more foreign investment but also want to lure good investors who can help our companies improve corporate governance,” Hue said, adding that the assets the government plans to sell “will include leading companies in energy, power and petroleum.”
According to Dang Quyet Tien, director general of the Ministry of Finance’s Corporate Finance Department, the number of enterprises earmarked for equitisation and divestment in 2018 account for over 50 and 46 per cent of the total number planned for 2017-2020.
“Therefore, 2018 can be considered the “hinge” year for SOE reform. Nonetheless, the annual equitisation and divestment schedule could be subject to changes as precisely 127 SOEs would be equitised and 406 would be divested by the end of 2020. Personally, I think the schedule depends on the determination of local authorities,” Tien said.
However, Tien expected a positive outlook for the equitisation and divestment this year as VN-Index reached a decade-record of 970 points in 2017 and became one of the world’s fastest growing stock indexes, largely due to the high growth of the stock market, which was also one of the most important determinants of the equitisation and divestment plans.
Foreign investment inflows were also extremely optimistic of the Vietnamese stock market, with net purchasing value equaling VND41 trillion (US$1.8 billion), a six-fold increase compared to the same category in 2016.
Besides, the commitment of the central and local legislators as well as the leaders of state enterprises will contribute to the success of equitisation this year as in the case of Sabeco’s divestment last year, Tien said.