Vinamilk SGX plan turns sour

The Ho Chi Minh Stock Exchange-listed Vinamilk, a Vietnamese leader in processing and providing dairy products, already completed all necessary listing procedures for the Singapore Stock Exchange (SGX) and was granted SGX permission.

However, a source close to the company said Vinamilk might shelve its listing plan and put the proposal to a vote at its upcoming annual general meeting (AGM) on March 25.

The major reason was that the company had no sound investment projects and there was no demand for capital, the source said.

Earlier, Vinamilk hired JPMogan to advise its overseas listing, and planned to sell a 5 per cent stake, or 8.85 million shares, on the SGX.

The company announced to sell bonus shares to its shareholders and sell an additional 3 per cent stake to the public.

 The new proposed shares are equivalent to the stake that Vinamilk wanted to float on SGX, meaning that there were no more available shares for foreign investors trading in Vietnam if Vinamilk floated shares abroad.

Vinamilk neither confirmed nor denied the information when contacted by VIR, saying that all documents at its upcoming AGM would be made public on its website on March 18 for its shareholders. Shares of Vinamilk on March 10 closed unchanged at VND92,000 a share when the VN-Index rised 2.55 per cent.

Listing on foreign bourses, in addition to domestic bourses, are now an option for Vietnam-based companies to raise funds. Others such as FPT, Kinh Do, Vietcombank, PVF, VIC, PVD, ITA, HAG and Trung Nguyen Coffee also expressed wishes to raise funds abroad.

“Given current market conditions and the fact that the listing was mainly for prestige rather than funding purposes, Vinamilk’s possible cancellation makes sense to us,” said a Ho Chi Minh City Securities Corporation analyst.

In a related development Nguyen Ngoc Canh, head of international relations for the State Securities Commission (SSC), said overseas listings and initial public offerings would be regulated in the amended Securities Law’s decree, to be promulgated in July.