In an initial public offering plan, Vietnam National Shipping Lines (Vinalines) will convert debts owed to other firms into shares and have a positive cash flow by 2019.

The IPO plan, jointly prepared by the Ministry of Transport and Vinalines, will be passed to the Government for consideration.

Vinalines will sell shares equivalent to 64% of its chartered capital, including offloading part of the State stake and issuing new shares. After the IPO, the State holding at Vinalines would fall to 36%.

The shipping line is valued at nearly VND21.29 trillion (nearly US$1 billion) with the State owning VND9 trillion.

It will issue an additional 336 million shares to increase its chartered capital by VND336 billion to VND9.3 trillion. Therefore, the number of shares in the IPO is 930 million shares at VND10,000 each.

Vinalines plans to sell 30% of shares to strategic investors, another 33.75% to the public and its creditors and nearly 1% to staff.

To become strategic partners, enterprises must be active in the sea transport, import-export and sea operation sectors or in other fields but with chartered capital of over VND1 trillion.

Vinalines also proposes the Government let banks and its creditors convert debts into shares at Vinalines.

The firm has restructured VND1.3 trillion out of VND12.3 trillion in debts and the debt restructuring process is expected to be complete by 2019.

A source from the steering committee for State enterprise reform and development told the Daily that substantially reducing the State stake at Vinalines to 36% would force Vinalines to improve business performance and thus make it competitive but the State could still be a majority shareholder at the firm and thus have a say in matters relating to restructuring, capital adjustment and investment decision making if needed.