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Economy

Vietnam's hydropower dam builder to raise $100m in IPO

State-owned Song Da to float 49% of shares on Dec. 25

Nearly half of Song Da Corporation, which built most of Vietnam's hydro plants, is being privatized.   © Reuters

HO CHI MINH CITY -- Vietnam's state-owned Song Da Corporation plans to raise some 2.4 trillion dong ($106 million) at its initial public offering on the Hanoi Stock Exchange on Dec. 25.

More than 219 million shares -- nearly 49% of the total -- will be offered at the starting price of 11,000 dong apiece ($0.48), according to a company announcement.

The company, with charter capital of 4.5 trillion dong, plans to sell a 30% stake to strategic investors, part of the floated shares at public auction on Monday.

Meanwhile, 822,000 preferential shares (0.0183%) will be sold to company employees. The government holding will be reduced to 51% with the IPO, and further divestment is planned after 2020.

Established in 1961 by Vietnam's Ministry of Construction, Song Da has been the main contractor for most of Vietnam's hydropower projects. It has also been involved in building other major infrastructure, including tunnels, highways, and factories.

The company's 2016 financial report valued the company's total assets at 31.9 trillion dong.

In the first half of 2017, Song Da recorded combined revenue of 9.9 trillion dong, a 42% decline year on year, but a net profit increase of 30% to 586 billion dong.

According to Vietnam's Steering Committee for Business Renovation and Development, 21 SOEs were equitized during the first 11 months of the year, earning the government over 2.2 trillion dong.

Hanoi has set targets for the number of SOEs to be equitized each year from 2016 to 2020, but is not expected to make the target of 45 for 2017. If another 10 enterprises owned by the ministry of defense are included, however, Vietnam had equitized 43 SOEs by November. Expected yields were not made known in advance.

(Nikkei)

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