MoF considers strategic foreign stake in Pacific Airlines

27-Jan-2005 Intellasia | 24/Jan/2005 Dow Jones | iWon money | 1:32 PM Print This Post

The finance ministry is considering plans to allow Pacific Airlines, the country’s second carrier, to sell shares to raise its registered capital and efficiency, a government official said January 25. The official with the Ministry of Finance said the government is restructuring Pacific Airlines to improve its operations.
“The government has allowed the MoF to take control of Vietnam Airlines 86.5% stake in Pacific Airlines, and we are discussing solutions with all the related authorities to make it (Pacific Airlines) profitable,” said the official who declined to be named.
“We will focus on finding ways to raise more funds for the firm in the first quarter this year, and currently, Vietnam’s law allows domestic and foreign investors to buy shares from Pacific Airlines,” he noted.
He added Vietnam prefers foreign investors who can offer strategic assistance to Pacific Airlines.
The airline, which has a registered capital of dong 40 billion, has accumulated net losses of dong 215 billion after more than 10 years in operation.
According to state media, the MoF is planning to raise aboutUS$15 million for its restructuring plans.
Pacific Airlines operates four Airbus aircraft on domestic and international routes. The airline has daily flights to HCM City and Da Nang in Vietnam, and five flights a week to Taipei and Kaohsiung in Taiwan.
Pacific Airlines’ seven shareholders are state-owned companies. They are: Vietnam Airlines (VAI.YY), Saigon Tourism Co., Vietnam Air Petro Co., Southern Airport Services Co., Vietnam Air Services Co., Air Import-Export Co and Trading & Transport Investment Co.
Vietnam currently has three carriers. Vasco, the third airline, is also a state-owned firm and it operates three small aircraft domestically.

 


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