PetroVietnam Oil Corp (PV Oil), Vietnam’s sole crude exporter, said it was in talks to sell as much as 40 percent to strategic investors and expects to narrow down to a list of about five potential bidders for the government this month.
PV Oil expects to raise at least US$270 million from one or two investors from the stake sale, president and CEO Cao Hoai Duong said at the company’s headquarters in Ho Chi Minh City, Vietnam.
About 10 potential strategic investors, including “major oil companies” from Japan, South Korea, Thailand, Vietnam and the Middle East, have applied to buy the shares, he said.
PV Oil would also offer as much as 15 percent of its shares in an initial public offering (IPO) in the first half of this year, the CEO said, adding that the stake sale to strategic investors would occur simultaneously with or after the IPO.
The company is to list shares at an undetermined time on the Ho Chi Minh City Stock Exchange after the IPO, he said.
“We are looking for good strategic partners so we can make another M&A [merger and acquisition] success,” Duong said, referring to past acquisitions to expand its retail network.
The sale would inject private investment in the state-controlled petroleum industry and accelerate government plans to open up the oil and gas sector, which is worth US$5.9 billion, Ho Chi Minh City Securities Corp Hanoi-based research manager My Truong said.
“PV Oil’s IPO is considered the most attractive one in 2017,” My said. “Almost all financial investors, both institutions and individuals, are looking forward to have a piece of the cake.”
PV Oil, the country’s second-largest petroleum retailer, is also seeking to expand its 22 percent market share, trailing behind Vietnam National Petroleum Corp, which has about half, according to Saigon Securities Inc estimates.
PV Oil, which derives 75 percent of its revenue from oil distribution, is aiming to triple its nationwide gas station network to 1,550 outlets through 2022, Duong said.
“We still have big room ahead to grow,” Duong said in the interview, referring to the government’s market share cap of 50 percent for petroleum distributors. “We are big enough to buy smaller competitors to expand market share.”
PV Oil plans on US$280 million in acquisitions in the next five years, he said, adding that about US$170 million would come from cash holdings, with the rest coming from bank loans.
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