Cienco 1 nears equitisation launch

The Ministry of Transport [MoT] asked Cienco 1 to wrap up its IPO and equitisation of its parent company in the first quarter of this year. How are you progressing toward this goal?

Just a week after our equitisation plan got the go-ahead from the prime minister, Cienco 1 sought MoT approval for its share starting price and list of strategic investors. It also informed staff at all levels and signed contracts with SHS Securities Company and the Hanoi Stock Exchange (HNX) to publish information and announce the March 21 auction date.

Also, strategic investors have made deposits and we finalised cooperation plans on March 6.

Finally, our company is selling preferred shares to employees and this is slated for completion on March 20.

It is fair to say that Cienco 1 is one of the first corporations in the transport sector to finalise its equitisation targets within the first quarter of this year, as per the prime minister’s order.

Can you give us some more information on your strategic partners?

The MoT has approved us to sell 7 million shares, or 10 per cent of chartered capital, to Yen Khanh Production, Trading Services Company Limited, as well as 7.7 million shares, an 11 per cent stake, to Japan’s Hassyu and finally 7 million shares to Fecon. All at a par value of VND10,000 per share.

Finding capable strategic partners with visions matching the company’s development plans plays a decisive role in the equitisation process.

Cienco 1 is one of only a few state transport contractors that appeals to foreign investors in the equitisation process. Hassyu is a leading construction equipment supplier in Asia with considerable management expertise and we will cooperate in big, complex transport infrastructure projects to ensure the utmost efficiency.

Why didn’t you try to scale up your chartered capital when you expect production value to climb as high as VND9-10 trillion ($428-$476 million) this year?

Our current chartered capital is VND700 billion ($33 million). We see no need to raise it as this point as we borrow very little from banks. In the coming time, when we step into more public-private partnership or build-operate-transfer projects that require investment into equipment, we will consider raising chartered capital.

What will happen to state capital after equitisation?

When we were working on our equitisation plans we proposed the government allow the MoT to act as the state capital representative of the company.

Under the plan approved by the government, before 2016 state capital held by Cienco 1 will be transferred to the state sovereign wealth fund State Capital Investment Corporation (SCCI).