Vietnam plans more share sale from dairy giant Vinamilk: official

By Reuters/Mai Nguyen   August 4, 2017 | 08:23 pm PT
Vietnam plans more share sale from dairy giant Vinamilk: official
Vinamilk’s products are displayed for sale at a shop in Hanoi, Vietnam August 4, 2017. Photo by Reuters/Kham
The sale of a 3.33 percent stake is expected in October and foreign investors would be able to bid.

Vietnam plans to sell a little more than 3 percent stake in dairy company Vinamilk this year, after a similar exercise in 2016 saw tepid response from investors unhappy over highly restrictive investment limits.

Vinamilk, along with two beer firms Sabeco and Habeco, are among the few attractive state assets and the stake sale is expected to push forward the government's plan to reform troubled state-owned enterprises.

The sale of a 3.33 percent stake is expected in October, likely even sooner, and foreign investors too would be able to bid, said Nguyen Duc Chi, chairman of State Capital Investment Corporation, the government's investment vehicle.

Chi said the state investment company would try to remove all "limitations" that were put in place last year, when investors subscribed to only 5.4 percent of the 9 percent shares on offer.

Restrictions on investment as well as unfavorable market conditions saw only two bids when the offer opened late last year, both from wholly owned units of Fraser and Neave, Vinamilk's existing shareholder.

Investors last year were also put off by the small offer size, as the government had said it would sell its entire stake, about 44.7 percent at that time, in Vinamilk. The government now owns 39.34 percent, Thomson Reuters data showed.

This time round, Chi said the stake sale would attract specific types of investors.

"There are different segments among investors," he said. "If we sell all of our shares, it may as well attract only one segment of investors; it's not guaranteed there will be many interested investors then."

The sale, if successful, would see the state investment firm reduce its stake to 36 percent, enough to retain veto rights in the dairy firm, which posted a 17 percent increase in net profit in the first half of 2017.

The state investor estimates the stake sale would fetch VND6.5-7.0 trillion ($285.90-$307.90 million), Chi said, or about VND134,484-144,829 per share.

Vinamilk shares closed flat at VND154,000 on Friday.

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