Gemadept in bold move for foreign listing

Tinh said the shipping company wanted to list abroad to raise funds for a number of multi-million-dollar projects.
SSC deputy chairman Vu Bang applauded Gemadept’s initiative, but said many things needed to be clarified before the plan could be implemented.
These included legal procedures, requirements for a local firm to list on an overseas stock market, overseas listing supervision, forex management mechanism, and foreign ownership.
“We will try our best to put the plan on track,” Bang said.
Regardless of whether they were listing on local or overseas stock markets, Bang said, foreign investors would be allowed to hold a maximum 30 per cent in a local company. The foreign ownership rate in Gemadept is reportedly 2.49 per cent.
Gemadept said it would use funds raised by the listing to purchase three container vessels for Asian shipping routes, to develop new container terminals in Quang Ninh and Ba Ria-Vung Tau provinces and to build a $18-million, 27-storey office building for lease in the centre of Ho Chi Minh City, where Gemadept is based.
“We will need large investors and partners to implement the big projects. Listing on international stock markets will make it easy to raise funds and improve international prestige for market expansion and development,” Tinh said.
“We have worked with several international financial consulting firms in Vietnam on the listing plan. However, which candidate will be selected will be decided after we get the SSC’s green light.”
Foreign financial experts have welcomed Gemadept’s move. Dominic Scriven, director of high-profile UK-backed Dragon Capital, said: “Although requirements for listing on the overseas stock market will be harder and pressure will be heavier, Gemadept’s initiative should be highly appreciated.

“It would be great if Gemadept could do it. Listing on an international stock market will benefit it in terms of fund raising and corporate image improvement,” he said.

Hong Kong and Shanghai Banking Corporation’s (HSBC) Johan Nyvene said: “Mobilising capital from foreign financial markets is not easy these days. Gemadept should seek advice from professional consultants to approach foreign investors and persuade them to invest in its stocks.”

Gemadept is the country’s largest shipping agent and container handler with chartered capital of $13 million, and floated its 20 million shares on the local stock market last May.

The company has been rated among the most successful in the country’s shipping and forwarding sector since establishing Phuoc Long inland clearance depot (ICD) in 1995, with the highest capacity of all ICDs in the Ho Chi Minh City area.

The company accounts for 23 per cent of the national port operation market share. Apart from Phuoc Long ICD, which accounts for 74.2 per cent of its local turnover, Gemadept earns 25.1 per cent from road and water transport, while its shipping and forwarding services account for the rest.

The company also plans from now to 2005 to increase investments to expand Phuoc Long ICD to 50,000sqm and increase its capacity by 20 per cent before 2005.