VietNamNet Bridge - Nineteen companies have registered to buy a stake in PV Oil to become strategic shareholders when PV Oil launches its IPO, slated for early next year, according to a representative from PV Oil. Three fourths of the companies are foreign oil & gas firms.

PV Oil plans to launch IPO in early 2018

Under a government decision dated December 8, 2017, buyers have to prove that they can satisfy the requirements set by Vietnam.

Regarding financial capability, investors must have stockholder equity of at least VND2 trillion. They must have made profit in at least the last two years and must not have had accumulative losses.

Strategic shareholders must pledge to continue PV Oil’s major business field and use PV Oil brand for at least 10 years after they become strategic shareholders. And they must not transfer shares for at least 10 years.

Strategic investors must have strategies to develop and expand PV Oil’s market share in the future. According to Cao Hoai Duong, CEO of PV Oil, this is an important criterion for PV Oil to choose strategic investors.

In addition, strategic investors have to commit to prioritize to buy petroleum products from BSR and Nghi Son Oil Refinery.

Investors must have stockholder equity of at least VND2 trillion. They must have made profit in at least the last two years and must not have had accumulative losses.

PV Oil admitted that some investors showed concern about the requirement. Duong explained that if PV Oil buys products from BSR, it will be able to save on transport and storage costs. 

PV Oil affirmed that it would have great development potential after the IPO. It is a subsidiary of PetroVietnam, the national oil and gas conglomerate, and is the only company authorized to export crude oil and provide crude oil to Dung Quat Oil Refinery.

PV Oil holds 22 percent of the petroleum distribution market, ranking second in Vietnam, after Petrolimex, and second in Laos, with 20 percent of market share.

PV Oil still has opportunities to grow further, while the leading petroleum enterprise has nearly hit the threshold of 50 percent in accordance with the Competition Law.

PV Oil now has 540 filling stations across the country and 3,000 agents/general agents and 120 stations in Laos. It is expected that the distribution volume through retail points will increase to 35 percent by 2022.

PV Oil’s combined revenue is expected to reach VND55.5 trillion and pretax profit of VND520 billion.

Under Decision No 1979, PV Oil will sell a part of the state’s capital. Its charter capital is VND10.342 trillion, of which PetroVietnam holds 363 million shares, or 35.1 percent of charter capital.

Of these, 1.8 million shares, or 0.18 percent of charter capital, will be sold at preferential prices to workers, and 462 million shares will be sold to strategic shareholders. Foreign investors can buy no more than 49 percent of total charter capital.