Vi­etJet eyes list­ing abroad

Car­rier in talks with over­seas ex­changes in what would be a first for the coun­try

The National - News - Business - - Inside Track -

Vi­etJet is in talks to be­come the first com­pany in Viet­nam to list its shares on a stock ex­change over­seas as the car­rier, which con­trols more than 40 per cent of the do­mes­tic air­line market, seeks more funds af­ter plans for bil­lions of dol­lars in air­craft pur­chases. “We’ve been ap­proached by some for­eign stock ex­changes in­clud­ing Lon­don, Hong Kong and Sin­ga­pore, which ex­pressed their in­ter­est in our stock,” Nguyen Thi Phuong Thao, Vi­etJet’s founder and chief ex­ec­u­tive, was re­ported yes­ter­day as say­ing in Hanoi.

The plan for the 41 tril­lion­dong (Dh6.61 bil­lion) low-cost car­rier comes amid the gov­ern­ment’s eas­ing of rules to al­low more for­eign in­vest­ment in one of the fastest-grow­ing avi­a­tion mar­kets. Hanoi-based Vi­etJet re­ceived share­holder ap­proval in April to boost its for­eign own­er­ship limit to 49 per cent from 30 per cent.

“List­ing over­seas on big mar­kets will help in­crease our ac­cess to more fund sources, boost the trad­ing of our stock and ex­pand the list of our in­vestors,” said Ms Thao, a self-made bil­lion­aire. “We don’t want to hide our hope to be­come the first Viet­namese com­pany to list shares over­seas.”

Vi­etJet stock has surged by about 51 per cent since it started trad­ing three months ago, com­pared with a 6.6 per cent gain in the Bloomberg Asia Pa­cific Air­lines Index.

The over­seas list­ing plan would make Vi­etJet the first Viet­namese com­pany to of­fi­cially trade over­seas, ac­cord­ing to Tran Anh Dao, the deputy chief ex­ec­u­tive of the Ho Chi Minh City Stock Ex­change.

Vi­etJet, which be­gan op­er­at­ing six years ago, has 136 for­eign in­vestors who own 26 per cent of the com­pany, MS Thao, 46, said in April. She owns more than 60 per cent of the air­line di­rectly and through hold­ing com­pa­nies and other en­ti­ties, ac­cord­ing to fil­ings.

The in­crease in for­eign own­er­ship will need to be ap­proved by the prime min­is­ter, Nguyen Xuan Phuc, be­cause avi­a­tion is con­sid­ered to be a re­stricted in­dus­try, with the limit capped at 30 per cent. The air­line has filed pa­per­work re­quest­ing the in­crease, Ms Thao said.

Rais­ing the limit is not aimed at at­tract­ing a strate­gic in­vestor, al­though the com­pany is open to one, she said.

“We al­ways wanted to be the pioneer,” Ms Thao said. “We want to in­crease our stock value and to boost the abil­ity to mo­bilise cap­i­tal with more par­tic­i­pa­tion of in­vestors.”

In May last year, she sealed an US$11.3bn deal with Boe­ing to buy 100 737 Max 200 air­craft just in time to have it an­nounced dur­ing Barack Obama’s visit to Viet­nam, when he was the US pres­i­dent.

The car­rier agreed to buy 30 A320­neos val­ued at $3.6bn at list price in 2015, adding to an or­der for as many as 100 Air­bus planes a year ear­lier.

The bud­get air­line fore­casts profit will rise by 36 per cent this year from 2.5tn dong in 2016. Vi­etJet ex­pects to serve 17 mil­lion pas­sen­gers this year, af­ter car­ry­ing about 15 mil­lion trav­ellers in 2016.

Its biggest com­peti­tor is Viet­nam Air­lines. The na­tional car­rier owns 70 per cent of low-cost op­er­a­tor Jet­star; Qan­tas holds the re­main­ing 30 per cent. Vi­etJet and Viet­nam Air­lines each have a 42 per cent share of the do­mes­tic avi­a­tion, said Bren­dan So­bie, a Sin­ga­pore-based an­a­lyst at Capa Cen­tre for Avi­a­tion. Vi­etJet’s share could rise to 50 per cent within three years, he added. Ms Thao said: “Viet­namese avi­a­tion is grow­ing at a high rate. “When we open the door wider for for­eign in­vestors and cre­ate more op­por­tu­ni­ties for them, it also means we in­crease the chance for the lo­cal avi­a­tion in­dus­try and do­mes­tic stock market to ex­pand and in­te­grate faster into in­ter­na­tional avi­a­tion mar­kets.”

Kham / Reuters

The bud­get air­line Vi­etJet, which ex­pects to serve 17 mil­lion pas­sen­gers this year, fore­casts profit will rise by 36 per cent.

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