Vinalines plans port share sale

The corporation   (Vinalines) general director Vu Khac Tu said the equitisation plan for Haiphong Port would be approved by April 15 and make an initial public offering (IPO) and sell stakes to strategic shareholders within the coming one and a half months.

“The biggest port in the north of the country plans to officially operate as a joint stock company from July 1, 2014,” said Tu.

The Vinalines board last week announced that it approved a corporate valuation for the equitisation of Haiphong Port at VND4.32 trillion ($206 million), equivalent to 201 per cent of its book value.

Haiphong Port is the biggest and busiest in the north, accounting for some 40 per cent of cargo volumes in the northern region. In 2013, Haiphong Port recorded a profit of VND150 billion ($7.14 million) and processed VND18.8 million tonnes of cargo.

The corporation will sell a 25 per cent stake in the port as part of the group’s wider restructuring plan for the 2012-2015 period.

According to Vinalines’ restructuring plan, profitable ports such as Haiphong, Saigon, Quang Ninh and Danang and its subsidiaries would be equitised by the end of this year.

Deputy general director of the Haiphong Port Bui Chien Thang said this meant that trillions of dong worth of shares would be up for grabs, but it was proving difficult to find buyers for such large stakes.

Thang told local media that investors would face tight scrutiny if they were considering becoming strategic shareholders in Haiphong Port.

He elaborated that domestic investors would need to have at least five years of experience in port and maritime operations, total assets of VND1 trillion ($47.6 million) and minimum equity of VND700 billion ($33.3 million).

The strategic shareholders would also have to boast at least three years of post-tax profits and not already be a strategic investor or founding shareholders or even a shareholder with a 5 per cent or greater stake in the charter capital of any business in the port sector in the northern region.

Ho Kim Lan, general secretary at Vietnam Seaports Association, said that it would be difficult to find strategic shareholders based on such tight requirements, especially in the current difficult economic situation.

However, Lan emphasised that Haiphong Port still offered good value given the successful equitisation seen at the city’s other port at Doan Xa.

Prior to 2001, Doan Xa Port had never surpassed VND8 billion ($380,952) in annual revenue until equitisation. The port’s revenue had jumped to VND40 billion ($1.9 million) in 2004, just three years after equitisation.