Sovico Holdings of the Vietnamese billionaire Phuong Thao, founder of the Vietjet Air is among the eight investors, including Shell, Idemitsu, Kuwait Petroleum International, Puma, SK, PTT and Sacom Investment Fund, informed the PVOil CEO Cao Hoai Duong on the sidelines of a roadshow on January 12.
PVOil will be an important step for foreign investors entering Vietnam's petroleum market.
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PVOil is projected 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. An approx. of 0.18% of its chartered capital or 1.8 million shares will be sold to PVOil’s employees.
Through a private placement, PVOil will offer an additional of 44.72% shares to strategic investors, resulting in a reduction of the government ownership through PVN in PVOil to 35.1%. Following this equitization process, PVOil is expected to raise in total of US$400 million. This will be the much needed financial means for the oil firm to tripling the number of gas station to 1,550 outlets by 2020.
Specifically, 850 gas stations will be acquired through mergers & acquisition (M&A) or construction, while the remaining 200 are under leasing contract. Along with other activities, total investment of PVOil in period 2018 – 2020 is expected to be nearly VND 11 trillion (US$495 million).
PVOil’s consolidated revenue in 2017 is estimated at VND56 trillion (US$2.4 billion), equivalent to 165% of the year plan, while the profit of parent company is VND325 billion (US$14 million) and subsidiaries of VND154 billion (US$6.9 million); consolidated before-tax profit totaled VND405 billion (US$17 million), an increase of 125% compared to the year plan.
Idemitsu and KPE are two shareholders of Nghi Son Refinery project, a condition for foreign investors entering the petroleum distribution market in Vietnam. As such, PVOil’s gas station network across Vietnam will become a platform to distribute Nghi Son’s petroleum products, in case either companies become strategic shareholders of PVOil.
Contrary to Petrolimex in distributing imported petroleum products, the main supply for PVOil is coming from Binh son Refinery (BSR) in range from 1.8 – 2 million cubic meters.
After completing the equitization process, PVOil will diversify its revenue streams through services in gas station such as convenience stores, maintenance services, or cafeteria. Besides, PVOil is considering the option of taking part in supplying petroleum for aircrafts, especially in the context of high rapid growth in Vietnam’s airline market. At present, there are only 2 companies including PA of Petrolimex and Skypec of Vietnam Airlines operating in this market.
