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Sunday, Jun 22, 2014

Business

Vietnam airlines submits equitisation plan

Vietnam News/ANN | Sunday, Jun 22, 2014

A Vietnam Airlines aircraft lands at the Noi Bai International Airport in Ha Noi. The national carrier has asked the Government to allow it to keep all income sources after it launches an IPO.

HA NOI - The national flag carrier, Vietnam Airlines has submitted to the Ministry of Transport its equitisation plan, in which the firm expects to keep its preferences after getting through equitisation.

The firm has asked the Government to allow it to keep all income sources after launching the IPO. The money will be added to its fund for buying more planes. According to a plan to develop the fleet approved by the Government last year, in the period from 2014 to 2018, the firm will need more than VND63 trillion (S$3.75 billion).

In addition, Viet Nam Airlines expects the Government to continue giving free guarantee for 100 per cent loans to buy planes. It also hopes to keep its name at present.

Viet Nam Airlines has a registered capital of VND14.1 trillion or US$671.4 million - equal to 1,410 billion shares in value of VND10,000 each.

The firm will launch an initial public offering this year, issuing shares that equal 25 per cent of registered capital for strategic investors and the company's staff in the first stage, the remainder will be owned by the State.

In the second stage, the State ownership will reduce but won't be lower than 65 per cent.

The Vietnam Airlines' equitisation steering committee revealed to online VnExpress.vn that the strategic investors would be airline groups or financial investors. The number of strategic investors will not exceed three.

To increase density and revenue, Vietnam Airlines will raise its standard to level 4 stars for the whole system including production and service. It was targeting a profit of 0.57 per cent of the total income this year, 1.96 per cent in 2015 and 4.81 per cent in the following two years.

In May, the Government approved the valuation of the flag carrier at VND57.156 trillion, or US$2.72 billion, based on its book value, of which, the State capital in this amount is VND10.567 trillion, or $507.79 million. 

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