Binh Son Refinery delays IPO to January 2018

BSR's IPO was put on ice once again

According to the plan, BSR would conduct its IPO on November 7, however, according to the latest information from Reuters, the sale will be moved to January 2018.

It is the second time that BSR has missed the deadline of its IPO. Earlier in November 2015, the government intended to hold the oil refinery’s IPO by the end of 2016. However, the process has taken longer than expected due to the complexity of evaluating the company.

In September 2016, BSR released plans to launch its initial public offering (IPO) at the end of 2017.

During over one year, from September 2016 to October 2017, BSR had been actively organising working sessions with 17 foreign and domestic investors to find strategic investors. All of these investors are heavyweights, thus it took BSR a long time to select the best fit.

Along with the deadline, there was a change in the offered stake volume. Notably, in mid-2017, BSR planned to put 4 per cent on sale, expecting to earn $80 million from the deal. However, recently, the company decided to increase the offered stake volume to 5-6 per cent.

Additionally, the list of investors queuing up to become BSR’s strategic investor was extended by the joining of Repsol Energy Group from Spain and Tin Thanh Group.

Notably, on November 7, representatives of Repsol participated in a working session with BSR’s leaders to find investment opportunities.

Regarding Tin Thanh Group, the group has publicly announced its ambition to spent VND40 trillion ($1.76 billion) buying a 55 per cent stake to become BSR’s strategic investor, while the company only has the chartered capital of VND200 billion ($8.8 million).

According to information published on BSR’s website, Tin Thanh Group plans to buy a 5 per cent stake in BSR in 2017. The deal would cost around VND3.6 trillion ($158.5 million). Then, Tin Thanh and BSR will propose the prime minister to allow the firm to increase its holdings to 55 per cent in BSR.

In May, Tran Tuan Anh, Minister of Industry and Trade, signed a decision that valued BSR at $3.2 billion or roughly VND72.88 trillion.

Therefore, Tin Thanh would have to spend around VND39.6 trillion ($1.74 billion) to purchase 55 per cent of BSR’s shares.

However, representatives of Tin Thanh were not available to comment on the deal.

BSR is an affiliate of Vietnamese oil and gas group PetroVietnam, which is directly in charge of the management and operation of Dung Quat Refinery—the country’s first oil refinery. The refinery was built to localise the petrochemical products supply. It was inaugurated in 2011 with a total investment amount of $3.05 billion and is currently able to satisfy 30 per cent of the domestic petroleum demand.

In the first ten months of this year, BSR earned VND63.3 trillion in revenue and contributed VND7.44 trillion ($32.7 million) to the state budget.

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