Wednesday, 17 Jan 2018
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INVESTMENTOPPORTUNITIES

Song Da Corporation to raise more than 100 million USD in IPO

Updated at Friday, 22 Dec 2017, 13:45
The Hanoitimes - Vietnam`s state-owned Song Da Corporation plans to raise some 2.4 trillion dong ($106 million) at its initial public offering (IPO) on the Hanoi Stock Exchange on December 25.
Previously, Song Da Corporation planned to sell 135 million shares for strategic investors (30%), conducting public auction at its IPO of 84.77 million shares (18.82%). However, this plan has been adjusted and the company will now conduct IPO for a total of 49% shares without any strategic investor. 
 
Song Da Building.
Song Da Corporation Building.
Specifically, more than 219 million shares -- nearly 49% of the total -- will be offered at the starting price of 11,000 dong apiece ($0.48), according to a company announcement. The company, with charter capital of 4.5 trillion dong, plans to sell a 30% stake to strategic investors, part of the floated shares at public auction on Monday. The government is expected to own 51% of Song Da Corporation shares until the end of 2019, and then to reduce the share number to under 50% by 2020. 

Meanwhile, 822,000 preferential shares (0.0183%) will be sold to company employees. The government holding will be reduced to 51% with the IPO, and further divestment is planned after 2020.

Established in 1961 by Vietnam's Ministry of Construction, Song Da has been the main contractor for most of Vietnam's hydropower projects. It has also been involved in building other major infrastructure, including tunnels, highways, and factories.

The company's 2016 financial report valued the company's total assets at 31.9 trillion dong.
In the first half of 2017, Song Da recorded combined revenue of 9.9 trillion dong, a 42% decline year on year, but a net profit increase of 30% to 586 billion dong.According to Vietnam's Steering Committee for Business Renovation and Development, 21 SOEs were equitized during the first 11 months of the year, earning the government over 2.2 trillion dong.

Hanoi has set targets for the number of SOEs to be equitized each year from 2016 to 2020, but is not expected to make the target of 45 for 2017. If another 10 enterprises owned by the ministry of defense are included, however, Vietnam had equitized 43 SOEs by November. Expected yields were not made known in advance.

Previously, in order to speed up the divestment process in the remaining months of 2017, representative of the Ministry of Finance said, the Ministry will recommend the MoIT responsible for divestment of the state fund in two brewers, Saigon Alcohol Beer Beverage JSC (Sabeco) and Hanoi Alcohol Beer Beverage JSC (Habeco) to be completed and transferred the state fund to the Support Fund for Enterprise Reorganization and Development before December 1, 2017. Thai Beverage Plc on December 18 took a majority stake in Sabeco valued at nearly 4.8 billion USD, after an auction for Vietnam’s larger brewer attracted no other major bidders.

Vietnam Beverage, ThaiBev’s domestic unit, took approx. 54% stake in Sabeco as Vietnam’s largest brewer. An undisclosed individual domestic investor had registered to bid for 20,000 shares. In all, the Ministry of Industry & Trade garnered bids for about 343.682 million shares in Sabeco. Specifically, the domestic investor bought 20,000 shares with price of 320,500 VND per share. While Vietnam Beverage took 343.66 million shares with price of 320,000 VND per share. As such, the average share price was determined at 320,000 VND per share. 
Ngoc Thuy
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