“Following Mobifone’s request, the move is aimed to clarify existing foreign ownership in the Vietnamese lender and ensure the legal rights of investors participating in the auction,” announced HNX.
Mobifone's divestment from two banks is part of its upcoming IPO.
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Under these circumstances, bidding deposits will be refunded to investors intending to join the auction as per HNX’s request.
Previously, Mobifone decided to auction 5.5 million shares in TPBank for an initial price of VND12,800 (US$0.56) per share, reducing its shareholding to 4.76%. The Vietnamese mobile network operator tried unsuccessfully to offload these stakes on two different occasions in 2016 and 2017 due to stock market uncertainties and the low liquidity of the ticker.
Mobifone expected this time to be different as the Vietnamese stock market is on the rise, reinforcing the strong recovery of bank stocks. Moreover, Mobifone’s offering price is considerably lower than the market price, with TPBank’s current trading value being approx. VND26,000 (US$1.14) per share in the Over-the-Counter (OTC) market.
Last December, TPBank has also concluded a deal to sell 4.99% of its shares to Finnish independent fund management company PYN Management for US$40 million, equaling a share value of VND30,000 (US$1.3).
In a related move, Mobifone will also hold an auction for 33.4 million shares at SeABank, equal to 6.11% of the bank’s charter capital, on February 7. With an initial price of VND9,600 (US$0.4) per share, Mobifone is expected to raise at least VND320 billion (US$14 million) and quit SeABank altogether.
The divestment from the two banks is in line with Mobifone’s policy of divesting its non-core business lines to prepare for its upcoming Initial Public Offering (IPO).
In 2015, the company was valued at US$3.4 billion by Ho Chi Minh Securities Corporation (HSC) as part of its planned IPO in 2016, however, the move failed to materialize in spite of interest from foreign telecom service providers like Singtel (Singapore), Telenor (Norway), Comvik (Sweden) or Telstra (Australia).
The process was further complicated as the Vietnamese government inspectorate is conducting an investigation of Mobifone’s billion-dollar acquisition of 95% of the stakes in multimedia company Audio Visual Global (AVG). The investigation’s final results, to date, have not yet been announced to the public.
As Mobifone’s US$3.4 billion valuation is only valid for 18 months, the company will have to be revalued, which is expected to take 6 months before starting the equitization process.
