Thesteering committee for Airport Corporation of Vietnam’s equitization scheme hasproposed increasing the starting price of ACV shares by VND700 each at theinitial public offering (IPO) auction set for December.

Ifapproved, the price would be VND11,800 per share instead of VND11,100 assuggested earlier by BIDV Securities Company, the consultant for thecorporation.

ACVwants to sell 77.8 million shares (3.47% of chartered capital) at the IPO. Ifall shares are sold at the newly proposed starting price, ACV would collect anadditional VND54.46 billion (US$2.4 million).

TheMinistry of Transport requested ACV and the consulting agency to explain theprice adjustment.

Theenterprise said it decided to adjust up the starting price as the country’smacro economy has improved compared to April this year when the VND11,100 pricewas decided.   

Therefore,ACV wants a higher price based on its projected cash flows and earningsforecasts in the 2015-2019 period. The firm hopes to post revenue of nearlyVND10.53 trillion and pre-tax profit of over VND2.16 trillion in 2019.

Thoughthe IPO auction is set for the end of this year, the price of shares willdepend much on ACV’s business and investments in the next five years.    

However,ACV will likely see its total assets, revenue and profit dropping in the comingtime if some of its services and operations are spun off.

Forexample, the international terminal at Danang airport is scheduled to be putinto use in late 2017 but it is being developed by Danang International AirportInvestment and Exploitation JSC in which ACV holds a 10% stake.

Meanwhile,ACV will have to take out more loans to build and upgrade a number of airportsacross the country in the coming time.

Thecompany estimates its revenue at some VND10.54 trillion and profit at VND2.4trillion in 2020, lower than the targets for 2019.

Aspart of the equitization scheme, ACV would sell a 20% stake to strategicinvestors, a 3.47% stake at auction and a 1.53% stake to its employees and thelabor union.

Earlier,the corporation wanted to pick local or foreign corporations, finance firms,airport management enterprises as its strategic investors but now also eyesinvestors in other sectors.

SGT