Vietnam Airlines raises $52M from IPO
HANOI (AFP) – Vietnam Airlines Friday said its long-awaited IPO had been ‘’a success,” raising more than $52 million for the national flag carrier, control of which remains firmly in state hands.
After decades of speculation and multiple failed attempts, the IPO went ahead with some 49 million shares -- around 3.5 percent of the company -- sold to more than 1,500 investors, the airline said.
The company sold all of the shares offered at an average price of 22,307 dong ($1.05) a share, it added in a statement, raising more than $52 million.
The buyers included two corporate investors, the statement said, without giving further details.
In Vietnam an IPO is a separate process from a stock market listing. It is not clear when shares in the airline will actually be traded on the Ho Chi Minh City stock exchange.
‘’ The IPO today is an important landmark,’’ said Pham Viet Thanh, chairman of Vietnam Airlines, in the statement.
The communist state retains a controlling 75 percent stake in the airline.
A further 20 percent stake will be sold to strategic partners, while the rest is set aside for airline employees and the trade union.
Analysts say Vietnam Airlines is in a relatively strong position domestically, despite new competition from low-cost VietJet Air, with the country of some 90 million a fast-growing aviation market.
But it will face stiff competition from regional rivals if it seeks to expand longhaul routes.
The IPO is part of a broader drive by Vietnam to clean up its sluggish state sector, long a drag on the country’s economy, by equitizing -- the local term for privatizing -- hundreds of state-run companies.