VEAM to launch largest IPO of the year

August 10, 2016 | 09:03

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Foreign investors are offered 167 million shares in Vietnam Engine and Agricultural Machinery Corporation (VEAM), equalling 13 per cent of its chartered capital, in its initial public offering (IPO) organised on August 29, according to information published on the Hanoi Stock Exchange (HNX) website.

With the initial price of VND14,290 ($0.64) per unit, the auctioned share volume will be valued at VND2.38 trillion ($106.6 million).

After the sale, VEAM’s chartered capital will increase to VND13.28 trillion ($595.5 million), equalling 1.33 billion shares. Accordingly, the state will hold 51 per cent of the chartered capital with 678 million shares, and strategic shareholders will hold 36 per cent, equalling 478 million shares.

VEAM employees will hold 0.49 per cent of the company stakes. The rest will be sold at the company's IPO on HNX.

Regarding strategic shareholders, Vietnam N.A Motor Co., Ltd. (N.A Motor), which spent VND1.25 trillion ($55.8 million) on acquiring a 97.7 per cent stake in Vietnam Motors Industry Corporation (Vinamotor) in January, registered to buy the assigned 36 per cent at the price of VND10.050 ($0.45) per unit, equalling VND5 trillion ($223.8 million).

As of now, only N.A Motor has expressed interest in becoming VEAM’s strategic shareholder, indicating a one-sided end to N.A Motor.

Established in 1990, VEAM specialises in manufacturing agricultural machinery, components, and assembling automobiles and motorbikes. The company has 20 subsidiaries nationwide, including Song Cong Diesel Limited Company, Southern Vietnam Engine and Agricultural Machinery Company Ltd. and An Giang Mechanical JSC, etc.

In addition, the company currently holds a 30 per cent stake in Honda Vietnam, a 20 per cent stake in Toyota Vietnam, and a 25 per cent stake in Ford Vietnam. Furthermore, it owns numerous sizeable land plots in Hanoi, Ho Chi Minh City, Haiphong, Dong Nai, and Ba Ria-Vung Tau, among others.

According to the company’s financial report, in 2015, it acquired a net profit of VND3.66 trillion ($163.8 million), VND3.39 trillion ($151.7 million) of which was distributed as dividend.

Regarding N.A Motor, established in 2005, the company specialises in distributing cars and motorbikes, selling spare parts, vehicle insurance, as well as providing vehicle maintenance and repair services. The company is currently expanding its operations to the real estate sector. N.A Motor, with its solid finances, commits to making Vinamotor become the country’s leading car manufacturer and distributor.