Vietnam state coffee firm plans 35-pct stake sale in IPO

REUTERS: Vietnam National Coffee Corporation (Vinacafe), the top stateowned coffee company, plans to sell a 35-percent stake in an initial public offering (IPO) either later this year or early next year, its chairman said yesterday.

Vinacafe’s privatisation plan and valuation process are expected to be completed by the end of June, and the timing of the IPO will depend how fast it obtains government approval, chairman Phan Xuan Thang told Reuters.

The stake sale is part of the government’s drive to trim stakes in state-owned enterprises (SOES), many of which have low profitability, but progress has been slow due to the small stakes offered, the State retaining a large degree of control and concerns about vested interests.

After years of delays, many SOES began selling shares or listed on the stock market after the new government took over in April last year, among them firms in the consumption, aviation and energy sectors.

The listing of Vinacafe would follow as soon as possible after the IPO, Thang told Reuters. In Vietnam, the IPO and listing are two separate processes.

The type of investors that could qualify for participation in the IPO has not been finalised, Thang said.

Vinacafe’s net profit last year surged 140 percent annually thanks to favourable business environment, support from the government and a better management experience which helped reduced unnecessary costs, he said.

Vietnam is the world’s second biggest coffee exporter after Brazil and the top robusta bean producer. The Southeast Asian nation shipped 1.78 million tonnes of coffee last year with exports of US$3.3 billion, government data showed.

Vinacafe’s coffee exports accounted for about 10 percent of Vietnam’s total overseas shipments last year, Thang said.