News
Vietnam Airlines to finalize equity deal by year end
December 18th 2015
Hanoi-headquartered Vietnam Airlines (VNA), is close to finalizing deals with three strategic investors for the acquisition of 20% of the largely government-owned carrier, its chief, Pham Ngoc Minh, told Vietnam's Bizlive news. Read More » He said the search for investors began in September 2014, but Letters of Intent did not arrive in Hanoi until last August. VNA hopes to raise at least 6.3 trillion dong ($280 million) through the equity sale to fund its fleet renewal plans. Japan’s largest carrier, All Nippon Airways (ANA), has been unofficially confirmed as one of the interested parties.
“We are still negotiating and aim to close provisions of the deal by the end of this month so the draft contract can be forwarded to the Ministry of Transport and our prime minister for consideration and signing in the first quarter of 2016,” Pham said.
VNA is mulling turning the resort town of Da Nang into a secondary hub to supplement its existing hubs at Ho Chi Minh (HCM) and Hanoi. The Skyteam carrier deploys 30.3% of its capacity from HCM, 24.9% from Hanoi and 8.2% from Da Nang. VNA serves Chengdu, Guangzhou, Hangzhou, Incheon, Siem Reap, Taiyuan, Narita and Wuhan internationally from Da Nang.
In related news, Airports Corp. of Vietnam, the sole operator of the country’s 22 civilian airports, raised 1.12 trillion dong ($49.6 million) last week in the nation’s largest Initial Public Offering (IPO) in 2015, a result that will reduce the government's stake to almost 75%, according to its IPO prospectus.
"It's very encouraging to see the result," said Marc Djandji, head of institutional sales at VPBank Securities. "The IPO was oversubscribed and it attracted lots of foreign investors." Its monopoly will "allow the company to benefit from strong growth in Vietnam's aviation market in the long-term", VPBank Securities said in a note.
