Binh Son Refining and Petrochemical Co., Ltd. (BSR), the operator of Dung Quat Refinery, will divest the state-owned stake by putting the shares on sale on the stock exchange, instead of offering it to strategic investors as initially planned. Indian Oil Corporation is the most promising investor in the second auction.
|The decision may open the doors for more investors as the auction will not only be for strategic investors |
BSR has adjusted the state ownership divestment plan. According to Tran Ngoc Nguyen, general director of BSR, the refinery would have to complete the selection of strategic investors before March 8, which it missed due to complications during the selection process. Besides, the government refused to extend the deadline for the firm. As a result, BSR decided to put the shares on sale on the stock exchange.
The script of BSR’s divestment will be similar to that of Sabeco, which sold 53.59 per cent to a Thai partner. At the same time, BSR will have the opportunity to find more interested investors, instead of limiting the sale to the strategic investors as previously planned.
|Indian Oil Corporation Ltd. is considered the most promising investor for the second share sale. |
Nguyen shared that at present, Indian Oil Corporation Ltd. is considered the most promising investor.
However, if BSR conducts the second share sale on the stock exchange, it will push out the process by at least one more year.
“BSR will take a long time to complete the divestment procedures. The Indian and other investors are evaluating their investment plans in BSR. BSR is a large-scale firm, thus the evaluation is also expected to last between six months to one year,” Nguyen stated.
Nguyen added that the offering price will depend on the market at the time of the sale.
Along with the state ownership divestment plan, BSR also has accelerated the progress of expanding Dung Quat Refinery.
To date, the firm completed 99.8 per cent of the land clearance and compensation. It has co-operated with design contractors to build an updated environmental impact assessment report according to local authorities' requirement. BSR expects to select the EPC contractor next year.
Regarding the arrangement of the $1.2 billion loan to expand Dung Quat Refinery, the representative of BSR released that it will sign a contract with a consultancy firm to be in charge of building the plan to call for capital in the project.
Nguyen stated that the consultancy firm is be a local firm that has a joint venture with foreign partners.