Omanis ready to shake on Haiphong Port deal

The Omani State General Reserve Fund seem happy enough to hold a minority stake
in Vinalines’ Haiphong Port

Last week, Vietnam’s largest shipping firm Vinalines submitted its capital divestment plan from northern Vietnam’s largest port. The move will open room for Vietnam-Oman Investment JSC (VOI), belonging to Oman’s State General Reserve Fund (SGRF) sovereign wealth fund.

Specifically, Vinalines proposes transferring a maximum 29.58 per cent stake in Haiphong Port to VOI, tantamount to more than 97 million shares, while Vinalines will continue to hold a 65 to 75 per cent in the port’s chartered capital as required by the Vietnamese government. With a transfer price estimated at least at VND13,800 per share, Vinalines expected to reap about VND1.33 trillion ($62.5 million) from the deal.

In its plan, Vinalines will also seek a strategic investor for Haiphong Port through direct negotiations in the post-IPO period as is the case with national flag carrier Vietnam Airlines.

“Under regulations from the Omani government, the SGRF is not allowed to partake in auctions in its investment ventures, but it could only take part in negotiations, or in other words, negotiation is the prerequisite to SGRF investment projects,” said Vinalines general director Le Anh Son.

This is also the only remaining issue for Vinalines’ sale of the stake to VOI.

Earlier, the Vietnamese government agreed to sell part of Vinalines’ stake in Haiphong Port to VOI. The Government Office announced the government had agreed to 19.68 per cent minimum to a maximum 29.58 per cent of Vinalines holding in Haiphong Port be sold to VOI.

According to a Vinalines source, once becoming Haiphong Port’s strategic investor, the VOI/SGRF would provide $2 million each year for three years to finance training, hiring of experts and technical assistance to help boost the port’s efficiency.
The SGRF also has a track record in global seaport investment. With the total asset value reaching $35 billion, the fund has been investing in major seaports throughout the world.

At Kumport terminal in Turkey, cargo throughout jumped 52 per cent after three years following SGRF investment and it has become the largest port in Turkey. “The partner from Oman has proposed a meticulous and highly convincing plan with a detailed implementation roadmap to help improve the efficiency and profitability of Haiphong Port,” Son unveiled.

With the chartered capital of more than VND3.26 trillion ($152.7 million), Haiphong Port reported the cargo throughput volume of 19.75 million tonnes, including one million TEUs of container cargo per year. Last year, it reported the total revenue of over VND1.57 trillion ($73.6 million) and profits of VND397 billion ($18.5 million).

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