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Vietnam state TV unit drops IPO after drawing just 1 bid

Hanoi's privatization drive suffers setback as investors balk at price

People walk past the stock exchange center in Hanoi. Vietnam has been listing stakes in state-owned companies as it seeks to open up its economy.   © AP

HO CHI MINH CITY -- Vietnam Television Cable Corp. has called off its initial public offering after only one bidder registered for the public auction at the Hanoi Stock Exchange on Tuesday.

VTVCab, a subsidiary of state-owned Vietnam National Television, announced in March it would offer more than 42 million shares, amounting to a 47.84% stake in the company, with the aim of raising 6 trillion dong ($264 million) for state coffers. 

Market observers said one reason for the lack of interest in the auction was the offer price starting at 140,900 dong a share, which was considered excessive relative to the company's performance and to current business conditions.

The government had expected to reduce state ownership in the company to 51%.

VTVCab's failed IPO follows several other disappointing offerings, including those of real

estate developer Becamex IDC and hydropower contractor Song Da Corp in December, and Vietnam Rubber Group and power company Genco 3 this year.

Offerings taking place at short notice and a lack of transparency in company information have resulted in limited interest from institutional investors, wrote Hung Pham, associate director at Saigon Securities Research, in a report. Hefty valuations have also put off potential buyers.

VTVCab had a 24% share of the country's pay TV market in 2016, ranking second, according to Media Partners. The company, which had about 2 million subscribers in 2017, also runs internet service provider and TV advertising businesses. Pay TV and internet subscribers accounted for more than 60% of its total revenue last year. 

VTVCab has seen steady revenue growth, but net profit was unsteady between 2014 and 2016. It has struggled to compete with a dozen players in the local TV market, including Viettel, Vietnam Posts and Telecommunications, FPT Telecom and Mobifone. Pay TV subscribers in Vietnam grew 7% over the past five years to reach 13.2 million in 2017.

The government in Hanoi is this year speeding up its divestment of state-owned companies. The first quarter saw companies including Binh Son Refinery, PVOil, PVPower, Vietnam Rubber Group, Vinafood II, Hanoi Trade Corporation and Genco 3 offer their shares for the first time, raising more than $900 million.


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