Vietnam National Shipping Lines, better known as Vinalines, is pressing ahead with a planned initial public offering despite concerns over the appetite of potential investors.
The company is hoping to raise VND 4.89trn ($210m) through an IPO that is set to launch on the Hanoi Stock Exchange on 5 September.
The state-owned shipping conglomerate aims to sell a 34.8% stake to investors, bookrunner Saigon Securities said on Wednesday.
That is higher than the 20% stake that it indicated it was planning to sell via the IPO in June. The other 14.8% shareholding was to have been sold to strategic investors.
Vietnamese financial news sources indicated that there was little appetite from eligible investors, hence the decision to release the entire 34.8% stake through the IPO.
An additional 0.2% — or 2.8 million shares — will be sold at preferential prices to the company’s employees and trade union.
Earlier this year, Vinalines said it had received a high degree of strategic investor interest from trade-related companies in Japan, South Korea and the US.
In addition, Belgian ports company Rent-A-Port had signed a memorandum of understanding (MOU) with Vinalines in mid-2017 in the hope of acquiring a 10% stake upon the completion of a flotation.
Last week, Vinalines sources revealed to the Vietnam Investment Review that only one South Korean company — identified only as one of the largest conglomerates in that country — had submitted a registration document to buy a 14.8% stake in Vinalines at the close of registration on 12 July.
However, it would appear no potential strategic investors met the stringent conditions required for those wanting to buy a stake in the Vietnamese company.
Vinalines' total assets are estimated to be worth VND 28.14trn. As of the first quarter of this year, the company owned a fleet 84 vessels, consisting of 65 bulkers, 13 boxships and six tankers.
In its IPO prospectus, Vinalines admitted its shipping operations faced challenging times ahead due to market volatility and the low-value cargoes available in the trades that the Vietnamese fleet traditionally operated in.
Vinalines’ main draw for investors is its extensive port and logistics investments, including majority stakes in seven of Vietnam’s largest ports, analysts believe.
The company said the IPO proceeds would be used to rejuvenate its fleet and further port infrastructure investments.
