Clifford Chance
Equitisation of Petrolimex
8 February 2011
In January 2010 Petrolimex was granted approval for a partial initial public offering (IPO) as part of Vietnam's renewed equitisation programme. This was followed in December 2010 by the company submitting an equitisation plan for government approval and on 21 January 2011 it announced that it intends to complete a partial IPO in 2011.
Whilst Petrolimex is permitted to equitise up to 25 per cent of the company's share capital it is not yet known what the size of the initial sale will be, although it is expected that an offer to employees and private investors will be made prior to the selection of a strategic investor.
In addition to containing a valuation it is customary that the equitisation plan details a list of preferred strategic investors and the criteria on which they shall be selected, in order that a partial or complete sale of the authorised amount may be completed upon approval of the equitisation plan.
The Vietnamese Government's equitisation agenda, aimed at both reforming and partially privatising the country's state-owned enterprises (SOE's), witnessed a revival in 2010 with the commencement of the equitisations of PV Gas, Vietnam Steel Corporation of Petrolimex. It is also expected that following a stalling of the equitisations of Mobifone and Vietnam Airlines, as a consequence of the financial crisis, that these entities may resurrect their equitisation programmes in 2011.
