Vinamotor to carry out IPO in late 2014 March

The Vietnam Motors Industry Corporation (Vinamotor) is expected to carry out initial public offering (IPO) at Hanoi stock market with 51% of their total shares.

Vinamotor Chairman of Board Members – Mr Nguyen Hai Trung stated that Vinamotor’s actual value for equitization issue was over 1.04 trillion with State capital accounting for 860.1 billion (82.62% of the charter capital).

After the IPO, State capital at Vinamotor will be reduced to 48.5%. The remaining shares (0.5%) will be incentively sold to the company’s Trade Union.

Vinamotor Chairman of the Board Members – Mr Nguyen Hai Trung

The value of share will be set to 10.000 VND per share and this will also be the starting price for auction. Each investor will have to buy at least 100 shares. Domestic investors will be able to buy a maximum amount of 51% of shares offered (51 million shares) whereas foreign investors can only buy up to 49 million shares.

According to the company’s restructuring plan, Vinamotor will become a joint-stock company prior to June 1st, 2014.

Vinamotor is currently regarded as the “big brother” of auto mechanics in Vietnam with their main products vary from passenger cars over 29 seats (60% of the segment’s domestic market shares), truck with weight of less than 10 tons to car accessories, steel structures and building machine. They also provide a service of passengers and goods transport and other services such as vocational training, driving test monitoring, hotel businesses, tourism and labor export.

Vinamotor is currently co-operating Siemens

Vinamotor is currently co-operating Siemens (Germany) to produce and put in operation a bus using energy-saving technologies with an efficiency of 35% (hybrid); carry out technology transfer in truck and bus assembly; reach an technical license agreement with Huyndai Motor..

Mr Nguyen Hai Trung said that Vinamotor’s 51% IPO was a bold decision as the market has not fully recovered to its old glory days. However, if the State budget still takes up a huge part in Vinamotor market shares, the company’s equitization will remain to be difficult.

Therefore, if financial capital is invested favorably (in this IPO), Vinamotor will then continue to reduce the proportion of State capital in the company.

Vinamotor will continue to operate as a joint-stock company.

The customers in this first IPO is expected by Vinamotor to be their current partners in the field of automobile engineering, building machine manufacturing, goods and passengers transporting..

However, the main target of the company is to find overseas strategy partners. “Overseas partners have finance and transactions in many markets. They also provide better technical support for the company. We are currently contacting involving foreign partners”, said Mr Trung.

If the 51% shares cannot be sold out totally on the upcoming March 27th, Vinamotor will still continue to operate as a joint-stock company, maintain stability and make up plans to sell the rest of them.

Minh Anh