Morgan Stanley (MS.N: Quote, Profile, Research) has paid US$217 million for a 10% stake in PetroVietnam Finance Corp (PVFC), the financial arm of Vietnam’s state oil firm said on Friday December 28, ahead of an expected stock market listing early next year.
Morgan Stanley has been stepping up its operations in communist Vietnam, where booming growth and a freeing up of the economy is fuelling strong demand for financial services. Prior to PVFC deal, Morgan Stanely established a securities joint venture with state-run State Capital Investment Corporation.
Hanoi-based PVFC said the US investment bank had paid 69,974 dong (US$4.34) a share, the same average price retail investors paid at PVFC’s initial public offering in October.
PVFC works as a de facto bank for oil monopoly PetroVietnam and finances energy sector projects. Its total assets this year would more than triple to 56 trillion dong (US$3.48 billion) and rise further to 68 trillion dong next year, the company said.
The company raised US$259 million from selling a 11.93% at the October IPO, valuing it at nearly US$2.2 billion.
PVFC has already announced that it plans to sell a further 8% stake to a foreign strategic partner, but is yet to name the investor.
A PVFC official told Reuters last month the firm had completed its application to list on the Ho Chi Minh Stock Exchange .VNI in the first quarter of 2008. Vietnam, which joined the World Trade Organisation in January, holds IPOs separately from stock market listings.
PetroVietnam is slated to reduce its holding in PVFC to 60% next year from 70% now, PVFC said.
The company’s revenues are projected to grow by two-third to 5 trillion dong next year, slowing from a three-fold rise this year, according to reports released to a shareholder meeting on Thursday.
PVFC projects net profit will grow 42.3% to 720 billion dong next year.
Crude oil is the largest export earner for Vietnam, Southeast Asia’s third-largest exporter of the fuel. The country sees investment of US$20 billion in the oil and gas industry by 2015 and another US$21 billion by 2025.
PVFC has said it will establish several subsidiaries in 2008 to diversify its investment portfolio, targeting areas such as financial insurance and securities. It also plans to open representative offices in Hong Kong or Singapore.
In 2008, it aims to invest 20 trillion dong, 55% of which would go to energy and minerals mining projects, 15% to banking and insurance and another 15% in property business.
Morgan Stanley is also advising Vietindebank, Vietnam’s second-largest bank, on its IPO and is bidding to advise on the IPO of MobiFone, the country’s number two mobile phone operator.