Saigon Tourist to auction stakes in loss-making Jetstar airline

State-owned tour developer Saigon Tourist will auction its entire holding of almost 363,800 shares of Jetstar Pacific Airlines Joint Stock Aviation Company this month, an amount equivalent to 1.14% of the budget airline’s capital.


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Jetstar Pacific’s accumulated losses have mounted to VND3.7 trillion (US$160 million) as of September 30, 2016, according to the figures released by Vietinbank Securities Co., who is the deal advisory.

The starting price is set at VND15,000 (US$0.66) a share, just a 13.6% of the face value of VND110,000 for a Jetstar Pacific’s share.

At this price, Saigon Tourist will book a loss of nearly VND35 billion for this investment.

All existing shareholders of Jetstar airlines are eligible to participate in the auction, scheduled on April 26.

Saigon Tourist’s divestment is forecast to be difficult, especially following Jetstar Pacific’s long streak of losses. 

Founded in 1991, Jetstar Pacific is Vietnam’s first budget airline, but its performance has been left behind by its rival Vietjet Air, which started operation in 2011.

According to Vietinbank Securities Co’s report, Jetstar Pacific earned total revenues of nearly VND4 trillion in the first nine months of 2016, up VND550 billion over the same period of 2015. 

However, it posted a loss of VND346 billion during the period, a bad performance compared to a profit of VND80 billion in first nine-months of 2015.

It accumulated losses of nearly VND3.7 trillion by the end of September last year, of which short-term financial liabilities have swollen to VND1.8 trillion.

The airline’s equity capital shrank from VND3.5 trillion to just VND413 billion.

National flag carrier Vietnam Airlines is its largest shareholder with a 68.85% while Singapore-based Qantas Asia Investment Company Pte Ltd owns 30%.

Other two minor stakeholders include Saigon Tourist with a 1.14% and Luong Hoai Nam, Jetstar’s former general director, with a 0.01% stake.

In April last year, Vietnam Airlines and Qantas unveiled plans of pouring additional US$139 million to double the size of Jetstar Pacific’s fleet to 30 aircraft over the next four years.

Saigon Tourist reported a plan to offload Jetstar Pacific shares in 2015 but did not make it due to transfer restrictions.

VNA

Saigon Tourist to auction stakes in loss-making Jetstar airline, vietnam economy, business news, vn news, vietnamnet bridge, english news, Vietnam news, news Vietnam, vietnamnet news, vn news, Vietnam net news, Vietnam latest news, Vietnam reaking news
 
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