VN airport operator raises $49m

HANOI: Airports Corp of Vietnam, the sole operator of the country’s airports, raised 1.12 trillion dong (US$49.6 million) in the nation’s largest initial public offering this year.

Airports Corp sold 78 million shares at an average price of 14,344 dong each in an auction, Ho Chi Minh City Stock Exchange said.

It received bids for 114 million shares from domestic and foreign investors. The company will offer an additional 449 million shares to strategic investors in a private placement that will help reduce the government’s stake to 75%.

“It’s very encouraging to see the result,” said Marc Djandji, head of institutional sales at VPBank Securities JSC. “The IPO was oversubscribed and it also attracted lots of foreign investors.”

Vietnam’s civil aviation industry is growing rapidly, with passenger traffic at domestic airlines rising 27% in the first 10 months of this year to 25.6 million. The nation, which is trying to complete a share sale programme that began in the 1990s as a way to spur growth, sold stakes in 79 state companies through July, compared with its full-year divestment target of 289 companies.

The public and Airport Corp’s employees and union will own 5% of the company after the IPO and the private placement. The airports operator will select strategic partners to whom it will sell the additional shares, amounting to 20% of the company’s enlarged capital, and report to the Ministry of Transportation by the end of January.

Airports Corp operates all 22 civil airports in Vietnam.

Its monopoly will “allow the company to benefit from strong growth in Vietnam’s aviation market in the long term”, VPBank Securities said.