The details were revealed by a high-ranking Vietcombank source after the government agreed in principle to its equitisation proposal last week.

Vietcombank missed its scheduled initial public offering in August due to its equitisation amendment to select a foreign strategic partner first before the bank is equitised.

The bank will submit its choice of a strategic partner to the government by September 20 which will be rubber stamped by early October.

The foreign partner and Vietcombank will negotiate a price before the IPO goes ahead. There will be more different offer prices for foreign strategic partners than those asked for in the initial public offerings.

“Offers from foreign strategic partners to run Vietcombank will be based on technical support and company experience. The government will also decide on the size of incentives such as being allowed to acquire a larger stake than 15 per cent in Vietcombank,” said the source.

The government will also require foreign strategic partners to hold Vietcombank’s stock for at least three to five years instead of six months such as TPG’s commitment in the deal with FPT.

“One of the most important incentives given by the government is to allow Vietcombank to run as a multi-functional financial institution based on international practices,” said the official.

The new incentive will lift concerns held by foreign investors about the governance of Vietcombank with the state still holding a majority stake. The government also agreed with the bank’s equitisation proposal to define the bank’s corporate value basing on its book value and international methods.

The bank had its total assets valued at VND166.9 trillion ($10.4 billion) and an equity of VND11.1 trillion ($695 million).

The government will funnel capital for Vietcombank’s funds on infrastructure to expand its investment business after equitisation.

The government officially allowed Vietcombank and Vietnam Development Bank to invest money in building the Hanoi-Haiphong toll expressway in April.

The two banks plan to establish a Vietnam expressway joint stock company with a chartered capital of VND5 trillion ($312.5 million) to build the expressway, part of the Haiphong-Kunming corridor.

The road is scheduled to begin taking shape next year and requires a total investment capital of VND17 trillion ($1.06 billion) under build-operate-transfer mode.

The two banks are asking the government to give incentives to decide the toll fees and select contractors. The company also asked local provincial authorities along the route to give them more than 1,000 hectares of agricultural land to build industrial parks and urban zones.

The expressway will have six lanes and consists of the Hanoi-Dinh Vu and Dinh Vu-Lach Huyen projects in Haiphong City, which will facilitate infrastructure to the international Lach Huyen Port.

The new road runs in parallel with the current expressway No5.

Source: Vietnam Investment Review.