Business
SCIC to hold auction for Vinamilk shares in November
SCIC is expected to announce the initial price for sale of more than 3% of shares of Vinamilk, which is expected to receive $280m in return.
The State Capital Investment Corporation (SCIC), is planning to hold a public auction for a more than 3.33% stake in Vietnam Dairy Products (Vinamilk) on the Ho Chi Minh City stock exchange on November 10.
The initial price for each share is expected to be announced 7 – 10 days in advanced of the auction. The Chairman of the SCIC director board Nguyen Duc Chi said, if the initial price is announced too soon, the market will be influenced. As such, when the auction takes place, the announced price will not reflect the market price”.
Previously, Mr. Nguyen Duc Chi said that the company had carried out roadshows in Hong Kong and Singapore and discussed the stake sale with more than 30 investors from those markets. Another roadshow will be held at the Ho Chi Minh City Stock Exchange on Wednesday, Oct. 18, to provide information about Vinamilk and the share auction process.
According to SCIC, this auction will be different to the first one in December 2016, when Singaporean-based Fraser and Neave, a unit of Thai Beverage, acquired 5.4% of Vinamilk through two subsidiaries that each reached the 2.7% individual bidder limit. SCIC plans to announce the specific regulations around the sale of the shares by Oct. 21, and expects to set the offer price and receive deposits from the beginning of November.
Last month, SCIC announced the sale of a 3.33% stake in Vinamilk, with the aim of raising more than $280 million for state budget. SCIC currently owns 39% of the dairy. As such, after the move, SCIC’ total shares at Vinamilk will be around 36%. UBS AG Singapore and Saigon Securities are advising on the sale.
During the first nine months of 2017, Vinamilk had sales of 38.7 trillion dong ($1.7 billion) and net profit of 8.5 trillion dong, year-on-year increases of 10% and 13.6%, respectively. Domestic sales grew over 10% year-on-year, but export turnover slowed due to continued strife in Iraq, Vinamilk's largest export market. The dairy is aiming for 51 trillion dong in revenue and 9.73 trillion dong in net profit for 2017.
Vinamilk shares closed at 148,600 dong apiece on Monday, down 0.5% from the previous session.
In addition to Vinamilk, the government has put up effort in divesting from the country's other valuable companies, including two biggest local brewers in Vietnam Saigon Alcohol Beer Beverage JSC (Sabeco) and Hanoi Alcohol Beer Beverage JSC (Habeco).
To speed up the divestment process in the remaining months of 2017, representative of the Ministry of Finance said, the Ministry will recommend the Ministry of Industry & Trade (MoIT) responsible for divestment of the state fund in Sabeco and Habeco to be completed and transferred the state fund to the Support Fund for Enterprise Reorganization and Development before December 1, 2017. In case MoIT cannot announce the prospectus for divestments in the two companies by that deadline, the ministry should seek the Prime Minister’s instruction on handing over the State capital ownership to SCIC.
The divestment of Sabeco and Habeco has attracted significant attention in the market. MoIT holds 89.59 per cent of Sabeco’s charter capital and is expected to sell 53.59 per cent. In Habeco, the ministry plans to offload its entire holding of 81.79 per cent. Sabeco is the leading beer producer in terms of market share, holding 40 per cent of local beer consumption. Heineken came second, with a 25 per cent market share, followed by Habeco, with 18 per cent.
Vinamilk is companies with highest revenue in the Profit500 list 2017.
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Previously, Mr. Nguyen Duc Chi said that the company had carried out roadshows in Hong Kong and Singapore and discussed the stake sale with more than 30 investors from those markets. Another roadshow will be held at the Ho Chi Minh City Stock Exchange on Wednesday, Oct. 18, to provide information about Vinamilk and the share auction process.
According to SCIC, this auction will be different to the first one in December 2016, when Singaporean-based Fraser and Neave, a unit of Thai Beverage, acquired 5.4% of Vinamilk through two subsidiaries that each reached the 2.7% individual bidder limit. SCIC plans to announce the specific regulations around the sale of the shares by Oct. 21, and expects to set the offer price and receive deposits from the beginning of November.
Last month, SCIC announced the sale of a 3.33% stake in Vinamilk, with the aim of raising more than $280 million for state budget. SCIC currently owns 39% of the dairy. As such, after the move, SCIC’ total shares at Vinamilk will be around 36%. UBS AG Singapore and Saigon Securities are advising on the sale.
During the first nine months of 2017, Vinamilk had sales of 38.7 trillion dong ($1.7 billion) and net profit of 8.5 trillion dong, year-on-year increases of 10% and 13.6%, respectively. Domestic sales grew over 10% year-on-year, but export turnover slowed due to continued strife in Iraq, Vinamilk's largest export market. The dairy is aiming for 51 trillion dong in revenue and 9.73 trillion dong in net profit for 2017.
Vinamilk shares closed at 148,600 dong apiece on Monday, down 0.5% from the previous session.
In addition to Vinamilk, the government has put up effort in divesting from the country's other valuable companies, including two biggest local brewers in Vietnam Saigon Alcohol Beer Beverage JSC (Sabeco) and Hanoi Alcohol Beer Beverage JSC (Habeco).
To speed up the divestment process in the remaining months of 2017, representative of the Ministry of Finance said, the Ministry will recommend the Ministry of Industry & Trade (MoIT) responsible for divestment of the state fund in Sabeco and Habeco to be completed and transferred the state fund to the Support Fund for Enterprise Reorganization and Development before December 1, 2017. In case MoIT cannot announce the prospectus for divestments in the two companies by that deadline, the ministry should seek the Prime Minister’s instruction on handing over the State capital ownership to SCIC.
The divestment of Sabeco and Habeco has attracted significant attention in the market. MoIT holds 89.59 per cent of Sabeco’s charter capital and is expected to sell 53.59 per cent. In Habeco, the ministry plans to offload its entire holding of 81.79 per cent. Sabeco is the leading beer producer in terms of market share, holding 40 per cent of local beer consumption. Heineken came second, with a 25 per cent market share, followed by Habeco, with 18 per cent.
