The stake totaling 85.58 million shares will be sold as a single lot whose starting price is estimated at VND1,250 billion (US$55.6 million).

The ministry signed a divestment decision in late October, nearly a year after the Government approved the sale of the entire State stake at the biggest bus manufacturer in Vietnam. However, the ministry must wait for guidance from the State Securities Commission (SSC) to sell all the shares as a single lot.

State capital divestment at Vinamotor has been a hot topic in the past two years, especially after Vinamotor launched its initial public offering (IPO) in March 2014. The State put up a 51% stake up for sale at the IPO but only 3.1% was acquired by investors, raising VND15.7 billion with the winning price of VND10,000 each share.

Since May 2014, Vinamotor has obtained better business results though the State still holds a majority stake.

Between May 30 and December 31, 2014, Vinamotor obtained VND50.5 billion in after-tax profit, exceeding its target. The enterprise gained VND70.4 billion in profit in 2014 compared to VND16.7 billion in the previous year.

This year, the firm has reported VND871 billion in revenue and VND72 billion in pre-tax profit. It has offered shareholders a dividend of 4.7% for 2014, a great improvement compared to previous years.

Many investors expressed their interest in buying out State-owned Vinamotor after the Government announced the divestment decision. However, the Ministry of Finance and the SSC then had no regulations on share sales by lot.

Therefore, the transport ministry had to seek assistance from the Government and relevant agencies to prevent stagnation in corporate share sales. On November 19, the SSC signed a decision on share auctions by lot to make it easy for Vinamotor and other enterprises to sell State shares.

The starting price of the lot amounting to 85.58 million shares at Vinamotor is not the winning price at the IPO as it is put at VND14,612 each share, hence the lot’s total value of VND1,250 billion.

The transport ministry has announced conditions for Vinamotor’s investors. They are domestic and foreign organizations whose operations can support core business operations of the parent firm of Vinamotor.

Besides, investors must have capital from VND926 billion and not rack up accumulative losses as per financial reports on June 30, 2015. The shares are not transferable within five years.

Vinamotor expects to complete the share auction before December 31.

In addition, the Government has decided to offload entire State holdings at Vinamotor’s affiliate and branch - Transport Investment & Development Joint Stock Co. and an engineering factory.    

Saigon Times