PV Oil is coming close to the initial public offering (IPO) on January 25, 2018 at the Ho Chi Minh City Stock Exchange (HOSE). The corporation is about to offer 20% of its shares in the IPO with initial price offering of VND13,400 (US$0.59) per share in return for US$121.97 million.
Accordingly, the government ownership would be limited to 35.1% shares; strategic investors can own up to 44.72% shares.
“Strategic investors holding up to 44.72% of charter capital of PV Oil is very favorable for the IPO process, which allows investors to manage and run the business as well as vote for operational plans, not just purely contribute capital”, Cao Hoai Duong, General Director of PV Oil said.
At present, there are 29 licensed petrol importers and about 120 petroleum distributors in Vietnam. However, 90% of the market share still belongs to 5 major importers, in which PV Oil takes the second place, accounting for 20 - 22% of market share, following Petrolimex with 44% of market share.
By December 2017, PV Oil operates a network of 540 petrol stations and nearly 3,000 petrol stations dealer owned dealer operated, increasing sharply from 82 stations from newly established.
As a matter of fact, the leading Petrolimex cannot increase its market share by more than 50% under the Competition Law; in addition, the State will own 65-75% of shares, limiting Petrolimex’s opportunity to expand market share. At while, PV Oil’s IPO seems to be quite attractive for investors.
With the chartered capital of VND10,342 billion (US$456 million) and a initial price offering of VND13,400 (US$0.59) per share, PV Oil seems to gain advantage over Binh Son Oil Refining Company (with a chartered capital of VND 31,004 billion and initial price offering of VND14,600 per share) and PetroVietnam Power Corporation (chartered capital: VND 23,418 billion, initial price offering of VND14,400 per share) under the current IPO picture.
Especially, compared to the PLX stock price of Vietnam Petroleum Corporation (Petrolimex) trading at more than VND64,000 per share, the opportunity for PV Oil is more open .
According to Cao Hoai Duong, 19 companies have registered to be strategic shareholders of PV Oil, some of which are large international corporations.
Under current regulations, foreign investors merely own the right to participate in Vietnam’s petrol retail market via purchasing shares in a major petroleum trading company if they invest in refineries.
Thus, only when foreign investors buy shares of BSR or foreign partners contributing capital in Nghi Son Refining and Petrochemicals invest, PV Oil can have foreign shareholders.
After equitization, PV Oil also plans to diversify operation via new range of services such as maintenance, repair of cars, motorcycles, retail of food, beverages, tobacco or food services..., as premise for trading potential value added services.
There are more than 20 oil and gas importers operating in Vietnam. Accordingly, PV Oil aims to buy some or all of small or ineffective petroleum business to expand market share and especially to increase retail revenue.
After five years of equitization, in 2022, PV Oil expects to have 1,570 petroleum stations and account for 35% of domestic market share, with the proportion of retail and industrial customers at 35%.
Accordingly, the government ownership would be limited to 35.1% shares; strategic investors can own up to 44.72% shares.
“Strategic investors holding up to 44.72% of charter capital of PV Oil is very favorable for the IPO process, which allows investors to manage and run the business as well as vote for operational plans, not just purely contribute capital”, Cao Hoai Duong, General Director of PV Oil said.
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By December 2017, PV Oil operates a network of 540 petrol stations and nearly 3,000 petrol stations dealer owned dealer operated, increasing sharply from 82 stations from newly established.
As a matter of fact, the leading Petrolimex cannot increase its market share by more than 50% under the Competition Law; in addition, the State will own 65-75% of shares, limiting Petrolimex’s opportunity to expand market share. At while, PV Oil’s IPO seems to be quite attractive for investors.
With the chartered capital of VND10,342 billion (US$456 million) and a initial price offering of VND13,400 (US$0.59) per share, PV Oil seems to gain advantage over Binh Son Oil Refining Company (with a chartered capital of VND 31,004 billion and initial price offering of VND14,600 per share) and PetroVietnam Power Corporation (chartered capital: VND 23,418 billion, initial price offering of VND14,400 per share) under the current IPO picture.
Especially, compared to the PLX stock price of Vietnam Petroleum Corporation (Petrolimex) trading at more than VND64,000 per share, the opportunity for PV Oil is more open .
According to Cao Hoai Duong, 19 companies have registered to be strategic shareholders of PV Oil, some of which are large international corporations.
Under current regulations, foreign investors merely own the right to participate in Vietnam’s petrol retail market via purchasing shares in a major petroleum trading company if they invest in refineries.
Thus, only when foreign investors buy shares of BSR or foreign partners contributing capital in Nghi Son Refining and Petrochemicals invest, PV Oil can have foreign shareholders.
After equitization, PV Oil also plans to diversify operation via new range of services such as maintenance, repair of cars, motorcycles, retail of food, beverages, tobacco or food services..., as premise for trading potential value added services.
There are more than 20 oil and gas importers operating in Vietnam. Accordingly, PV Oil aims to buy some or all of small or ineffective petroleum business to expand market share and especially to increase retail revenue.
After five years of equitization, in 2022, PV Oil expects to have 1,570 petroleum stations and account for 35% of domestic market share, with the proportion of retail and industrial customers at 35%.
