VietJet eyes listing abroad
Carrier in talks with overseas exchanges in what would be a first for the country
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.”
The budget airline VietJet, which expects to serve 17 million passengers this year, forecasts profit will rise by 36 per cent.