Foreign companies look to develop airport projects

At a recent meeting with Minister of Transport Dinh La Thang, Frederic Dupeyron, general director of the France-based airport management firm Aeroport de Paris (ADP), expressed interest in buying a strategic stake in Airports Corporation of Vietnam (ACV) when the latter goes public.

Dupeyron suggested ACV choose partners that could assist the local company in building the Long Thanh international airport and equitising the firm. He also expressed his desire to financially contribute to the construction of the airport.

Not only ADP, but many others from Japan and South Korea have shown their interest in the equitisation of ACV. Earlier, Japan’s Sumitomo Mitsui Banking Corporation, which represented some Japanese companies, worked with leaders of the Ministry of Transport (MoT) on the investment opportunities in ACV, which will conduct the Initial Public Offering (IPO) in December 2015.

Nguyen Ngoc Thuyen, deputy head of the Department for International Cooperation under the MoT, told VIR that as aviation was a sensitive sector, becoming a strategic partner of ACV would be a stepping stone for a foreign group to join aviation infrastructure projects in Vietnam.

“Moreover, a strategic partner can join the transfer of the right to operate some local airports, including Phu Quoc, which has attracted much interest from local investors in recent times,” Thuyen said.

Thuyen added that many international groups, including India’s GMR Group and Made in USA Works, were also eager to invest in airport infrastructure projects, including the Long Thanh international airport. However, no final decisions were made yet, as aviation is a matter of national defence.

As the aviation sector is growing 14 per cent in the passenger number and 16-17 per cent in the cargo volume per year on average, the equitisation of ACV is considered one of the most long-awaited events in the transport sector in 2015.

According to Vu Anh Minh, head of the Enterprise Management Department under the MoT, as regulated, ACV cannot select more than three strategic investors, which would be decided after the criteria on the selection are approved.

Under the equitisation plan approved recently by the prime minister, ACV has the chartered capital of VND22.43 trillion ($1.02 billion), or 2.243 billion shares. The state will hold 75 per cent of the corporation’s charter capital, while 20 per cent will be sold to strategic investors, 1.4 per cent to its workers, 0.13 per cent to the trade union, and 3.47 per cent at public auctions.

Established in 2012 by merging three airport corporations in northern, central, and southern Vietnam, ACV is the country’s largest airport operator. It is operating 22 international and domestic airports nationwide, including the two most profitable airports, namely Noi Bai and Tan Son Nhat.

In the first three quarters of 2015, ACV made the revenue of nearly VND8.6 trillion ($393.85 million), up 14 per cent year-on-year, while its pre-tax profit was estimated at over VND400 billion ($18.34 million).

ACV’s airports are forecast to handle 54 million passengers and 902,000 tonnes of cargo this year, up 22 per cent and 15 per cent on year, respectively. It aims to make the revenue of VND9.8 trillion ($449.5 million) and the pre-tax profit of VND1.3 trillion ($59.63 million) in 2015, while its return on equity (ROE) is 7.9 per cent.