PV Oil misses IPO schedule again

PetroVietnam Oil Corporation (PV Oil), a major fuel trading arm of Vietnam National Oil and Gas Group (PetroVietnam), still cannot launch a much-awaited initial public offering (IPO) in July as scheduled, the second time it has missed the deadline in the past couple of months.


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At a conference in April, PV Oil considered launching its IPO in late June, as announced on its official news website, PV Oil News.

Later, Cao Hoai Duong, general director of PV Oil, told the news agency Bloomberg that the IPO might be postponed until July. However, there is still no more information about the plan until now. 

PV Oil is the second largest fuel trader in Vietnam with a market share 22%, just behind Vietnam National Petroleum Group (Petrolimex) with a market share of nearly 50% and about 2,500 gas stations.

The IPO plan by PV Oil has drawn great interest from the public and potential investors due to three key reasons.

Firstly, Petrolimex, the country’s leading fuel trading firm, has conducted its IPO since April and sold more than 8% of shares for Japanese firm JX Nippon Oil & Energy

Secondly, unlike Petrolimex who can sell only 20% of its shares for foreign investors, PV Oil is allowed by the Government to sell up to 65% of its shares for strategic investors, employees and the public. The state will hold only 35% after the equitization.

PV Oil’s IPO plan is to sell 49% of its shares for strategic shareholders, employees and on the stock market, and many investors have shown keen interest in its shares. Currently, about ten potential strategic investors which are leading oil and gas firms in Japan, South Korea, Thailand and the Middle East have put their names down for a stake in PV Oil.

PV Oil is said to have entered talks with strategic investors to offer 40% of its shares in hopes of raising at least US$270 million from the shares to be sold to one or two investors.

Thirdly, the IPO by Petrolimex and PV Oil is a major step in the Government’s plan to open up the US$6-billion fuel market to international competition.

So far, Idemitsu Q8 Petroleum LLC, a joint venture between Idemitsu Kosan (Japan) and Kuwait Petroleum International (KPI), has been licensed to retail fuels in Vietnam.

In a related development, the State Audit Office of Vietnam on December 31, 2015 evaluated PV Oil at VND10,342 billion, or roughly US$490 million, including 16% in fixed assets and 44% in investment capital in joint venture companies.

SGT

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