PV Oil may conduct IPO in fourth quarter

September 23, 2017 | 18:07

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PetroVietnam Oil Corporation (PV Oil) may put a 20 per cent stake, equalling 210 million shares, on sale at its initial public offering (IPO), which is expected to occur in the fourth quarter of this year, according to the latest report published on Ho Chi Minh City Securities Corporation (HSC)’s website.

With somewhat of a delay, PV Oil's IPO might come within the year

According to the initial plan, PV Oil was to conduct its IPO by the end of June, which was delayed to July. However, until early August, no information had been published.

The offered share volume at this IPO doubles the initial plan. PV Oil’s shares are offered with the initial price of VND14,300 ($0.63) apiece.

The adjustment of the offered share volume in the IPO is because the Ministry of Planning and Investment recently has issued a directive asking enterprises to offer at least between 15-20 per cent stake on their IPOs. The directive aims to deal with the problem that numerous enterprises have been offering relatively small share volumes to push share prices higher.

Along with the adjustment of the share volume, PV Oil also increased the share volume offered for strategic investors. Notably, the company will offer a 44.7 per cent stake for strategic investors instead of the previous 40 per cent.

PV Oil’s IPO is considered an outstanding deal in the Vietnamese petroleum sector in 2017. Thus, at the time when the plans were announced, ten strategic investors, including major oil companies from Japan, South Korea, Thailand, Vietnam, and the Middle East, expressed interest.

PV Oil’s main business is the retail distribution of petroleum with the second largest market share in Vietnam (22-25 per cent), only behind Vietnam National Petroleum Group (Petrolimex), which holds a 55 per cent market share.

It currently operates 500 petroleum stations and supplies petroleum for 3,000 other stations, almost all of which are located in the north. PV Oil plans to increase its petroleum stations to 1,500 units and increase its market share through M&A activities.

HSC expects that in 2017 PV Oil will earn VND48 trillion ($2.1 billion) in revenue and VND650 billion ($28.57 million) in pre-tax profit, signifying increases of 22 and 3.6 per cent, respectively.