Insurance giant Bao Viet inches closer to equitisation

Signed off: a government in principle approval decision has set Bao Viet on the path to equitisation

Bao Viet’s management board said the company is awaiting official approval from the government and expected the first shareholders’ meeting to be held early next year.
If approved, Bao Viet’s equitisation will progress quickly, and the next step will be to list on the stock market. The company’s initial plan to equitise life insurance first has changed and Bao Viet now plans to do everything at once.
Once equitised, Bao Viet will operate as a holding company with subsidiaries.
By that time, Bao Viet capital is forecast to increase to VND10 trillion ($660 million) from the current VND3 trillion ($200 million).
Under the plan, the State will keep the controlling stake, 10-15 per cent will be sold to employees, and the rest to individual and institutional investors, including foreign investors.
A representative of Dragon Capital Company, which manages funds for Vietnam Enterprise Investments Limited (VEIL), said the company had received a letter of invitation to purchase Bao Viet shares. No announcements, however, about stake deals have been made. The enterprise wants strategic investors, such as investment funds, commercial banks, financial institutions and big corporations.
Regarding sale of shares to foreigners, the representative said foreign investors could only hold up to a 30 per cent stake, which would be sold gradually.
Bao Viet has not announced what institution will conduct the corporation’s asset appraisal, but insiders said Bao Viet was discussing it with Singapore-based Temasek Holdings.
However, it’s possible that the enterprise will hire Hong Kong-based Tilinghast-Towers Perrin actuarial firm to do the appraisal.
Bao Viet is the largest insurance company in Vietnam, but it recently had to give way to UK-based Prudential, which reportedly holds 39 per cent of the life insurance market share, while Bao Viet holds just 38 per cent.
Bao Viet’s chiefs reported the corporation was focusing on quality of growth rather than market expansion, at any cost.