Vinalines set to launch IPOs for five large port operators

Viet Nam National Shipping Lines (Vinalines) has announced plans for initial public offerings (IPOs) for five more large port operators by the end of the year. Hai Phong Port has already been equitised.

According to Vinalines' restructuring plan, four ports, Cam Ranh, Nghe Tinh, Can Tho and Nam Can, will sell stakes by year-end.

Sai Gon Port will complete its equitisation plan at the same time.

The five ports have signed contracts with consultants for the upcoming IPOs. Meanwhile, Nghe Tinh Port has completed the company's valuation and submitted the document to Vinalines.

Vinalines plans to privatise 10 businesses as part of the group's wide restructuring arrangement. Five were finalised last year.

Along with the parent company, Vinalines also hopes to equitise three subsidiaries, Vinalines Hai Phong, Vinalines Shipping Company and Vinalines Container Shipping Company.

The state-owned shipbuilder posted losses for four consecutive years. It is likely to witness another year of failure as it incurred losses in the first half of this year and is forecast to lose more than VND1 trillion (US$47.4 million) for the whole year.

The group is also facing the huge task of repaying VND11 trillion ($523.8 million) to 24 creditors, nearly half of whom are foreign agencies.

Equitisation, capital divestment and winding up loss-making companies are viewed as the remedy for Vinalines to pay debts and revive its business.

However, the group is meeting difficulties finding investors. Recent IPOs of Quang Ninh Port, Hai Phong Port, Da Nang Port and Nha Trang Port did not attract many potential buyers.

Nha Trang Port and Quang Ninh Port sold about six to seven per cent of their total sales. Da Nang Port had better performance with a sale of 1.6 million shares, or 19.6 per cent of a total of 8.3 million shares put up for sale. Hai Phong Port sold more than 17.6 million shares, or 47 per cent of a total of 37.6 million shares.

"I don't think our ports are too bad," said Nguyen Van Cong, Deputy Minister of the Ministry of Transport.

In IPOs, only 25 per cent to total capital would be put on sale.

The State still held major stakes in the equitised companies after sales and this fact did not appeal to investors, Cong said.

Meanwhile, seaport operators listing shares on the HCM Stock Exchange have better business results.

Viet Nam Container Shipping Corp (VSC) announced its revenue rose 18 per cent and the pre-tax profit was up five per cent in the first quarter of the year. Saigon Securities Inc (SSI) forecast VSC's revenue and net profit could increase 10.3 per cent and 11.3 per cent year-on-year, respectively.

Dinh Vu Port Investment and Development Co (DVP) also reported a net profit of nearly VND46 billion ($2.2 million) in the first three months of this year.