PV Power raises $311 million from IPO

HÀ NỘI — PetroVietnam Power Corporation (PV Power) on Wednesday raised almost VNĐ7 trillion (US$311 million) for the Government by selling a 20 per cent stake at the initial public offering (IPO) held at the Hà Nội Stock Exchange.

The IPO sale exceeded the Government’s expected value by 3.7 per cent. The Government had previously expected to raise at least VNĐ6.74 trillion from PV Power’s IPO.

This was also the biggest deal in terms of value since the beginning of the year.

The 20 per cent stake, equal to more than 468 million shares, attracted nearly 2,000 investors (97 institutional investors and nearly 1,900 individuals) to attend the IPO, registering to purchase more than 491.4 million shares from PV Power.

The 468 million shares offered for sale at the IPO were sold at an average price of VNĐ14,938 per share, slightly higher than the starting level of VNĐ14,400 per share.

The highest bidding price was VNĐ28,000 per share and the lowest was VNĐ14,500 per share.

PV Power was a fully-owned company of the Vietnam National Oil and Gas Group (PVN or PetroVietnam) prior to the IPO.

The company was also the third PVN member unit to launch an IPO after Bình Sơn Refining and Petrochemicals Company Limited (BSR) and PetroVietnam Oil Corporation (PV Oil).

In the previous two deals, which were carried out earlier in January, BSR and PV Oil raised $244 million and $184 million, respectively, 58 per cent and 51 per cent higher than their expectations.

The average selling price of VNĐ14,938 per share, which was just VNĐ538 per share higher than the starting price, would generate profits for investors with short-term investment taste as the company was considered the second-largest electricity producer in Việt Nam and still had room to grow, individual investor Nguyễn Văn Tuấn said at the IPO.

According to PV Power general director Nguyễn Xuân Hòa, the IPO average selling price was cheaper than the expectations of analysts and brokerage firms.

The cheaper-than-expected average selling price at the IPO will help investors make profits and make PV Power shares more attractive to strategic investors in the future, he said.

According to financial expert Ngô Trí Long, PV Power shares would be valued at between VNĐ16,000-17,000 per share, while the figure had been calculated at VNĐ18,820 per share by Bảo Việt Securities Company.

After the IPO, PV Power will continue its equitisation plan by organising the first general shareholders meeting and operating as a joint-stock company.

The company will also sell nearly 29 per cent of its capital, or 676.38 million shares, to the strategic investor. Then, PV Power will sell a 0.1 per cent stake or 2.67 million shares to its employees.

PV Power also plans to trade shares on the Unlisted Public Company Market (UPCoM) within the next three months, starting on March 16, 2018.

After the equitisation process is completed, the Government’s ownership in PV Power will be curbed from 100 per cent to 51 per cent.

PV Power is now among the leading electricity producers in Việt Nam with a market share of 12 per cent. The figure is forecast to increase to 15 per cent by the end of 2026.

In 2017, the company posted VNĐ31 trillion in total revenue and VNĐ2.5 trillion in post-tax profit – out-stripping its full-year forecast by 83 per cent for 2017.

HCM City Securities Corporation had forecast that PV Power would raise its revenue and post-tax profit at an annual rate of 10 per cent and 22 per cent in the 2018-20 period.

Việt Nam’s power industry is predicted to be among the best-growing in Southeast Asia, with an expected yearly growth rate of 10 per cent over the next three years.

In 2000-14, per capital power consumption in Việt Nam grew at 12 per cent per year, making it the second-highest in the region behind Cambodia (16 per cent). — LV