Vietcombank’s shares will be available on the market before August 30, Vietcombank’s Director General Vu Viet Ngoan stated yesterday.

On March 20, Vietcombank’s Director General Vu Viet Ngoan had a meeting with the press, where he gave the latest information about the bank’s equitisation, the first meeting after the bank signed the consultancy contract with Credit Suisse earlier this year.

‘Commodity’ to be available prior to August 30

Mr Ngoan said that the bank and the consultancy firm have worked together to draw up a detailed plan for the bank equitisation. The detailed plan will be submitted to the Government by the end of April, or prior to May 10 at the latest.

It would take the Government four or five weeks to consult relevant ministries about the equitisation process, spelling that the detailed plan may be approved by early June. Vietcombank will have four or five weeks to take the preparatory works for the IPO (initial public offering).

It is very likely that Vietcombank’s shares would be available on the market in July or August at the latest. 10% of Vietcombank’s shares will be sold to the public, worth VND1tril ($62.5mil) in nominal value.

Mr Ngoan said that after the IPO, Vietcombank’s shares will soon be listed on the bourse. The procedures for the listing need to be completed soon, so that Vietcombank’s shares can be traded on the bourse in October 2007.

Mr Ngoan has admitted that Vietcombank has been advised to list several weeks earlier if the IPO would be completed in July. Experts said that the listing should not be more than eight weeks later than the IPO.

Vietcombank will not only list on the domestic bourse, it is also eyeing Hong Kong’s and Singapore’s markets. The bank’s leadership will fly to Hong Kong later this week to get more information about the market, while Singaporean market will also be surveyed in some days.

According to Mr Ngoan, the IPO and listing plans prove to be ‘feasible’ without any delay.

Strategic investors will be foreign

Mr Ngoan affirmed that Vietcombank will only select strategic shareholders among foreign investors, saying that this strategy is believed to be approved by the Government. The news may discourage domestic powerful groups.

Vietcombank will begin receiving the foreign investors, who intend to be Vietcombank’s strategic partners in mid April, to discuss the relevant issues in bilateral meetings.

Nevertheless, Vietcombank declines to give names of tentative strategic investors at this moment.

It is expected that many foreign investors want to become Vietcombank’s strategic partners. However, it would be very hard for Vietcombank to select strategic investors. A lot of questions have been raised, which have caused a headache to the bank’s leadership: how many strategic investors should Vietcombank have? How many percents of shares would the strategic investors hold?

According to Mr Ngoan, Vietcombank will not purely a financial group, it plans to become a powerful group, operating in many fields, including investment, insurance, securities, real estate and many others.

Vietcombank is moving ahead with its plan to set up a real estate trading company, and join forces with other banks to establish the company, specialising in developing the Hanoi – Hai Phong highway project.

If Vietcombank has one strategic partner only, the partner will not be able to assist Vietcombank to become a multi-functional group. Meanwhile, if the bank selects three or four strategic partners, it would not have enough shares to sell to the partners.

In the immediate time, the Government may allow Vietcombank to sell 10% of its shares only. If Vietcombank selects three or four strategic partners, it would sell 4-5% of total shares to each partner. Meanwhile, as Mr Ngoan has acknowledged, foreign investors said that they would not be interested if they can only buy less than $100mil worth of shares, and hold less than 10% of total shares.

Mr Ngoan said that Vietcombank may propose the Government to allow raising the ownership proportion held by strategic investors. However, the problem lies in the fact that if the bank gives higher ownership proportion to foreign strategic investors, it would also have to give higher ownership proportion to domestic investors.

He admitted that if Vietcombank sells 10% to foreign strategic shareholders, 10% for international IPO, and 10% to domestic shareholders (i.e 20% to foreigners and 10% to domestic investors), it would be a politically ‘sensitive’ problem.

Which opportunities for domestic investors?

Though domestic investors would not be chosen as strategic partners, the opportunities to cooperate with Vietcombank will still be open for domestic enterprises. In the future, Vietcombank will equitise its dependent companies and expand the operation scopes of joint ventures and associated entities.

As Vietcombank plans to become a multi-functional group, it would have to seek capital from outside and join forces with many local investors.

Mr Ngoan has revealed that Vietcombank would seek for the permission to create a capital source for investment, totalling $1-2bil. Domestic partners will make capital contribution to the fund, which will be injected in very important projects of the national economy.

Source: VietnamNet