Vietnam said on Thursday March 16 it was seeking a consultant to advise on the partial sale of Pacific Airlines, the country’s second-largest airline which escaped closure in late 2004 and is now valued at US$167 million.
“The finance ministry is looking to hire a consultant for the project,” deputy Finance minister Le Thi Bang Tam told Reuters on the sidelines of an investment forum in Hanoi.
Last year state-run media said the finance ministry, which controlled the then-indebted Pacific Airlines, had picked Singapore state investment firm Temasek Holdings to help restructure the airline by 2010.
Vietnam Television has said Temasek will buy a 30% stake in Pacific Airlines for US$50.1 million.
Tam declined to comment on the final results of negotiations with Temasek.
Sources close to the deal said Vietnam did not reach a final agreement with the Singaporean firm over differences in the time of the purchase. Hanoi had wanted to sell the stake quickly and early, they said.
In December 2004, Pacific Airlines escaped closure after running up debts of up to US$13.7 million. The government ordered its parent, national carrier Vietnam Airlines, to either raise new funds through a share issue or shut it down.
Vietnam Airlines and four affiliates owned 94% of Pacific Airlines, but the stake was taken control of by the finance ministry.
The airline has taken a series of steps to cut operating costs, including re-negotiating leasing contracts and dropping flights linking Hong Kong and Da Nang in 2004.
“The airline is doing fine now,” Tam said, without elaborating.