PV Oil silent about IPO date

August 03, 2017 | 11:47

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After having missed the deadline numerous times, PetroVietnam Oil Corporation (PV Oil), a member of Vietnam's oil and gas group PetroVietnam, has yet to release the specific time for its initial public offering (IPO), according to newswire Saigontimes.

The petroleum deal of the year was put on ice with no deadline in sight (Illustration)

According to the initial plan, PV Oil will conduct its IPO by the end of June, selling a 49 per cent stake for strategic shareholders, employees, and other investors. At the time the plans were announced, there were 10 strategic investors, including major oil companies from Japan, South Korea, Thailand, Vietnam, and the Middle East, which have expressed interest in acquiring PV Oil stakes.

PV Oil CEO Cao Hoai Duong told Bloomberg that the firm expects to earn $270 million by selling a 40 per cent stake to one or two strategic investors. However, the IPO was delayed in July and no more information has been published since.

PV Oil’s IPO is considered an outstanding deal in the petroleum sector in Vietnam in 2017 due to numerous reasons.

First, PV Oil’s main operation is the retail distribution of petroleum with the second largest market share in Vietnam (22-25 per cent), only behind Vietnam National Petroleum Group (Petrolimex), which holds a 55 per cent market share. Thus, acquiring PV Oil’s shares will pave the way for investors to join the potential market valued at $6 billion.

Second, according to new regulations, PV Oil is permitted to sell a maximum of 65 per cent of its stakes, instead of the 20 per cent in Petrolimex’s case, for strategic shareholders, investors, and employees.

Besides, the firm is operating with significant profit. Notably, according to its consolidated financial report on the first six months of this year, PV Oil earned VND74.25 trillion ($3.28 billion) in consolidated net revenue, up 26.4 per cent on-year, and VND2.4 trillion ($105.86 million) in consolidated pre-tax profit, with VND1.18 trillion ($52.05 million) pre-tax profit coming from the petroleum business alone.

In 2016, PV Oil’s estimated consolidated revenue was $1.5 billion. The revenue of the parent company was nearly $1.1 billion. The company’s consolidated profit in 2016 was $23.3 million. As of December 31, 2015, the firm was valued at VND10.34 trillion ($456.08 million), 16 per cent of which derives from fixed assets and 44 per cent of which is investments in subsidiaries and associated companies.