09:58 | 05/03/2018 Companies
(VEN) - The Vietnam National Shipping Lines (Vinalines) will hold its initial public offering (IPO) in the end of March 2018. The state is expected to hold 65 percent of its chartered capital of over VND13.9 trillion, or US$630 million.
Vinalines holds the shares of many high-margin companies in the field of ports and maritime services. Therefore, the business results of these subsidiaries are consolidated into the financial statement of Vinalines, contributing to reducing the loss of shipping sector. Specifically, port sector achieved profit before tax of more than VND1.1 trillion and maritime services recorded total profits of over VND80 billion in 2017, while shipping sector saw a half reduction on the loss compared to 2016.
In addition to the decision to retain the dominant position in the parent company, Vinalines is also allowed to hold a maximum of 65 percent of registered capital at key ports, including Hai Phong, Sai Gon and Da Nang. Vinalines will continue to hold the shares of logistics businesses, and promote divestment in shipping companies. There are many reasons leading to a decision to hold the dominant position in some key ports. Of which, the prosperous business results of port sector and maritime services have helped Vinalines reduce shipping sector’s losses and balance its revenue and expenditure. Moreover, the potential value of ports will help increase the attractiveness of the parent company in equitization.
In the long run, Vinalines will focus on developing and exploiting seaports in strategic locations that play important roles in the three regions and are the lifeline of the national transportation network. Vinalines has currently prioritized investment in deep-water harbor and international transshipment port projects, including Hai Phong Port with two container terminals, which can receive ships with a capacity of 8,000 TEU (twenty-foot equivalent units), and Lien Chieu Port, which can receive ships with a capacity of 100,000 tonnes. Vinalines will also focus on completing and putting into operation the first phase of the Sai Gon-Hiep Phuoc Port and investing in the port’s second phase. It will raise the efficiency of joint-venture ports in Cai Mep-Thi Vai in the southern province of Ba Ria-Vung Tau and other ports, including Vinalines Hau Giang, Can Tho and Cam Ranh.
Vinalines will make some changes in its organization and management after the IPO, in order to expand its access to capital markets and improve capacity and business efficiency. After equitization, Vinalines will control stakes in 34 subsidiaries.
Nguyen Canh Tinh, acting general director of Vinalines, said that with satisfactory results after a period of restructuring as well as efforts to maintain the high volume of state-owned capital at the company, the position and value of Vinalines will change, opening new opportunities for a business when it converts operations into a joint-stock company model. The parent company will play the leading role and be the intermediary point to help member units promote links between shipping, port management and maritime services, and logistics aspects.