Citi and Morgan Stanley advise Vietnam Airlines on $108m strategic sale to ANA

The carrier has successfully completed the strategic sale of 8.771 per cent of its share capital to Japan’s largest airline group ANA Holdings in exchange for proceeds of VND2.431 trillion ($108 million). The sale follows Vietnam Airlines’ domestic IPO which was completed in November 2014. Citi and Morgan Stanley acted as the consortium advisors for Vietnam Airlines throughout the entire domestic IPO and strategic sale process.

The strategic partnership will enable both Vietnam Airlines and ANA to share operational and management know-how to improve service quality and tap the rising demand for air services in the Asian market, especially the Cambodia-Laos-Myanmar-Vietnam group of countries which has significant growth potential in the region.

“Thanks to the advisory from Citi and Morgan Stanley, Vietnam Airlines has successfully completed equitisation process and strategic sale that creates our firm partnership with ANA,” said Pham Ngoc Minh, chairman of Vietnam Airlines. “Those deals have marked important milestones in Vietnam Airlines’ development and enhanced our brand and image internationally. The cooperation with ANA, one of the world’s best customer service airlines, will further help upgrade our fleet with newest generation aircraft, expand our international footprint and improve our service quality and efficiency.”

Under the partnership, ANA Holdings and Vietnam Airlines will launch codeshare arrangements which will cover 30 major domestic routes within Japan and Vietnam and 10 international routes between two countries and a shared mileage programme from the start of the 2016 winter. The two airlines also plan to combine a range of services including passenger check-in, cargo loading, ground handling services, catering, aircraft maintenance and other services at airports in Japan and Vietnam.

Headquartered in Hanoi, Vietnam Airlines operates 92 routes to 20 domestic and 29 international destinations with average 400 daily flights. The airlines is operating the young fleet of 87 modern aircraft mainly including new and modern aircraft such as Boeing 787 Dreamliner, Airbus A350-900 XWB, Airbus A330, Airbus A321 and Boeing 777.

“Citi feels very proud and privileged to be the joint lead financial advisor for Vietnam Airlines throughout the entire process of this landmark transaction. We believe this strategic sale will bring significant values to Vietnam Airlines and help increase the airline’s competitiveness in international markets,” Natasha Ansell, managing director, Citi’s country officer for Vietnam said. “It also demonstrates our strong commitment to bring the best products and services together with our over two-hundred-year expertise to support Vietnam Airlines in achieving its goal of becoming one of the leading airlines in the region.”

Citi, the leading global financial institution, has approximately 200 million customer accounts and does business in more than 140 countries. Citi in Vietnam with two branches in Hanoi and Ho Chi Minh City and a nationwide partnership network that covers all of Vietnam’s 64 cities and provinces.

“ANA's investment in Vietnam Airlines marks a landmark transaction in the Asian aviation sector. It brings together two renowned airlines, providing ANA with access to attractive, high growth markets of Vietnam, Myanmar, Laos and Cambodia whilst enabling Vietnam Airlines to leverage ANA’s best-in-class operations and service offerings,” Gregory Thiery, managing director and co-head of Southeast Asia Investment Banking for Morgan Stanley said. “Morgan Stanley is delighted to have acted as joint lead financial advisor to Vietnam Airlines. The transaction is a testament to our leading advisory franchise in the global airline sector and the Vietnamese market.”

Morgan Stanley (NYSE: MS) is a leading global financial services firm providing a wide range of investment banking, securities, wealth management and investment management services. With offices in more than 43 countries, the firm’s employees serve clients worldwide including corporations, governments, institutions and individuals.

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