BIDV Insurance to issue shares for foreign investors

An office of BIDV Insurance. The company plans to offer strategic foreign investors a 35-per cent stake. File Photo

Company Chairman Pham Quang Tung told the local press on Wednesday that the issuance was aimed at raising the firm's charter capital to about VND1 trillion (US$47.62 million), of which the 41 million volume represented 35 per cent.

Tung did not reveal details to investors, but said the company had scrutinised related issues to select partners, who shared a similar business strategy and corporate culture, had a good financial capacity and were looking to be involved in a long-term commitment.

He said the company was expected to finalise negotiations on the transactions within this month. It also planned to submit a plan to regulating agencies during the second quarter and complete the transaction during the third.

It would also let shareholders vote two more members of the management board later, who would represent the foreign investors.

The 35 per cent stake is higher than the figure the company announced before shareholders last year, which was 30 per cent. "During the working process, given their commitments, the partners expect a stake that is large enough," Tung explained.

He added that 35 per cent was the maximum level a company could offer foreign investors, because any higher ratio would affect the controlling stake owned by the Bank for Investment and Development of Viet Nam (BIDV). The bank currently holds 78.4 per cent of the firm's equity.

In an online report on Wednesday, BIDV Insurance also reported a total turnover of VND314 billion (US$14.95 million) during the first quarter of this year, up 48.5 per cent over the same period last year. Pre-tax profits reached VND35.44 billion ($1.69 million), reflecting a year-on-year increase of 30 per cent.

The company said its joint-venture and affiliate units in Lao and Cambodia had significantly contributed to satisfactory business results. The firm had also received a licence from the authorities in Myanmar to establish a representative office in March, and this would act as a premise for it to expand markets in the future.

On April 16, the company's shares closed at VND17,400 (82 cents) per share on the HCM City Stock Exchange.

BIDV and Australia's QBE International Insurance Company formed the BIDV-QBE Insurance joint venture in 1999. The bank acquired shares of the Australian partner in the joint venture and changed its name to BIDV Insurance in 2006.

BIDV Insurance is based in Ha Noi and specialises in non-life insurance, reinsurance and financial investments.