The Binh Son Refining and Petrochemical Company (BSR), the operator of the Dung Quat Oil Refinery in central Quang Ngai province, will hold an initial public offering (IPO) of 7.79 per cent of its charter capital, or 242 million shares, on the Ho Chi Minh Stock Exchange on January 17, with a starting price of $0.64 (VND14,600) per share.

BSR held a roadshow on December 20 to introduce investment opportunities, shortly after Deputy Prime Minister Vuong Dinh Hue signed a Decision approving its equitization plan.

According to the Decision, PetroVietnam will hold more than 1,333,214,835 shares post-equitization, or 43 per cent. Shares sold to employees will total 6,483,000 shares, or 0.21 per cent, while 241,556,969 shares, or 7.79 per cent, will be publicly auctioned, and 1,519,244,812 shares, or 49 per cent, will be sold to strategic investors.

Foreign investors may own up to 49 per cent of charter capital.

“The company has recently worked with 17 local and international investment funds and five strategic partners,” Mr. Tran Ngoc Nguyen, CEO of BSR, told the roadshow. “They include major investors such as the Repsol Group from Spain, two major oil and gas corporations from the US, Macron Petroleum from South Africa, and an investor from Brunei. Over the last year, many potential foreign investors have come to explore investment opportunities in BSR.”

The Repsol Group wishes to not only own shares in BSR but also participate deeply in the management, operations, and crude oil trading of Dung Quat.

According to the company’s financial statement for the end of September, BSR has more than $120 million deposited with OceanBank, which has temporarily ceasing trading. This and other losses are a source of some concern for many investors.

Major oil and gas corporations such as Russia’s Rosneft, South Korea’s SK Group, Thailand’s PTT, and the Kuwait National Oil Corporation have all expressed an interest in buying BSR shares.

The Petrolimex Group also wants to become a strategic partner through share purchases and will prioritize consumption of petroleum products from Dung Quat.

After nearly nine years of operations, since February 2009, the Dung Quat Oil Refinery has produced and sold nearly 50 million tons of different products, earning revenue of approximately $38 billion and contributing nearly $7 billion to the State budget.

BSR accounted for 16 per cent of PetroVietnam’s total revenue and 10 per cent of its State budget contributions this year. It also contributed 33 per cent of its total profit.

VN Economic Times