Vietnam’s largest IPO of 2016 to launch on August 29

By Dam Tuan   August 13, 2016 | 04:36 pm GMT+7

The company with sizable stake in Toyota, Honda and Ford in Vietnam will offer 167 million shares.

The largest Initial Public Offering (IPO) in 2016 of Vietnam’s stock exchange will take place on August 29 with 167 million shares of Vietnam Engine and Agricultural Machinery Corporation (VEAM).

The minimum value of the IPO will be over VND2.3 trillion ($103.32 million) and foreign investors are offered 12.57 percent of the company’s charter capital at the initial price of VND14,280 ($0.64) per share, according to information published on the Hanoi Stock Exchange (HNX) website.

VEAM with its IPO consultant on August 12 organized an introduction road show to present investment opportunities for investors. The machinery producer is estimated to have the charter capital of about $600 million after the auction, equivalent to 1.33 billion shares.

vietnams-largest-ipo-of-2016-to-launch-on-august-29

VEAM will have the largest IPO in Vietnam's stock exchange in 2016. Photo from baogiaothong.vn

The government will own 51 percent of the charter capital with 378 million shares and the rest will go strategic investors (36 percent), invester through an auction (12.57 percent) and preference shares for the company’s staff (0.43 percent). The rest will be sold at the company's IPO on HNX.

VEAM currently holds a 30 percent stake in Honda Vietnam, a 20 percent stake in Toyota Vietnam and a 25 percent stake in Ford Vietnam. The corporation also owns numerous land lots in prime locations of Hanoi, Ho Chi Minh City, Hai Phong and other large cities.

VEAM is has the fifth highest revenue among enterprises under the Ministry of Industry and Trade, only behind the PetroVietnam, Vietnam Electricity (EVN), Saigon Beer-Alcohol-Beverage JSC (Sabeco) and Petrolimex. In 2015, the corporation’s financial report showed net profit of VND3.37 trillion ($151.2 million).

Established in 1990, VEAM specializes in manufacturing agricultural machinery, components, and assembling automobiles and motorbikes. The corporation has 20 subsidiaries nationwide, including Song Cong Diesel Limited Company, Southern Vietnam Engine, Agricultural Machinery Company Ltd. and other large manufacturers.

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