Petrolimex plans to divest from PG Bank

PG Bank (PGB) announced that the bank received a document from the central bank which allows it to transfer all the shares that Petrolimex holds through auction at the stock exchange.

The auction is scheduled to take place in the third quarter of the year.

The plan on withdrawing capital from PG Bank was actually first announced in 2015, but to date the deal has not been completed. 

Petrolimex is the biggest shareholder of PG Bank with an ownership ratio of 40 percent.

With the current prices of PGB shares in the stock market, if it successfully divests from PG Bank, Petrolimex would collect VND2.52 trillion from the deal.

Prior to that, at PG Bank’s 2022 annual shareholders’ meeting, a representative of Petrolimex announced the plan to divest all of its capital in the bank through an auction to be held at the Hanoi Stock Exchange.

In order to be sure that foreign investors attend and win the auction and don’t violate the regulations on maximum foreign ownership ratio (30 percent), PG Bank’s shareholders have agreed that the foreign ownership ratio is temporarily capped at 2 percent of charter capital. At this time, the foreign ownership ratio at PG Bank is nearly 0 percent.

Of the operational commercial banks in Vietnam, PG Bank has the smallest assets and capital. With charter capital of VND3 trillion and capitalization value and capitalization value of VND6 trillion, the bank can be easily taken over if a group of investor spends VND2.52 trillion to acquire 40 percent of shares that Petrolimex plans to transfer.

In 2022, PG Bank expects to make a pre-tax profit of VND430 billion and have total assets of VND43.659 trillion, which means a growth rate of 7.7 percent. In Q1 2022, the bank earned VND127 billion worth of pre-tax profit.

After the news about the divestment was made public, PGB shares saw a sharp price increase at the July 19. The price once reached the ceiling of VND21,000 per share (+ 15 percent) with the highest liquidity over the last two months.

Earlier this year, analysts predicted that 2022 would see many merger and acquisition (M&A) deals.

Hanh Nguyen