One more port to go public in December

After equitising, the firm will have the registered capital of VND308.6 billion ($14.5 million) and the government will hold a 75 per cent stake. 1 per cent is slotted for sale to employees at a preferential price.

Chan May Port lies between Vietnam’s central province of Thua Thien-Hue and Danang city. It is capable of receiving vessels up to 30,000DWT and large international cruise ships. The firm plans to expand the port to raise its cargo capacity to 100 million tonnes per year and docking capacity to 50,000DWT.

According to the company’s website, in the first nine months of 2014 the firm earned the net profit of VND4.4 billion ($206,000), up 30 per cent on year, with the revenue of VND70.2 billion ($3.3 million), up 20 per cent on year.

Chan May is just one of a series of ports on the equitisation list for 2014. Others include Haiphong, Quang Ninh, Nha Trang and Danang which held IPOs earlier this year. Of the four, Haiphong was the most successful with 17.6 million share sold out of a total 37.6 million on offer, coming to 47 per cent. The remaining three only sold 7.5 per cent, 6.3 per cent and 19 per cent of their shares on offer.

The failure of these IPOs was attributed to the large controlling stake the government continues to maintain in these ports’ holding companies, “which explains why strategic investors and foreign investors rarely pay special attention to these ports,” noted Nguyen Hong Quang, associate analyst at Vietnam Capital Securities.

“If investors want to hold stakes in these ports for the long-term, they want to get involved in management positions,” he said, “so the government’s overwhelmingly majority position is not in their favour.”