State-owned power generation firm to go public
State-owned power generation firm to go public
Power Generation Corporation 3 (Genco 3), the biggest by capacity of the three Gencos under Electricity of Vietnam, is going to be the first among them to go public as part of the government’s plan to create a competitive power generation market.
Genco 3 shares are not considered attractive. According to EVN’s analysis of the Gencos in preparing for equitisation, in the 2014-2019 period they are projected to have negative cash flow.
The firms have trouble raising enough reciprocal capital to carry out already started projects. Specifically, Genco 1 needs VND24.443 trillion ($1.16 billion), Genco 2 VND5.284 trillion ($250.4 million) and Genco 3 VND39.652 trillion ($1.88 billion).
“The Gencos will have to figure out a solution to this problem very soon,” said an EVN official, who added that “After equitisation, EVN cannot guarantee 100 per cent of the loans the Gencos take out the way it did back when the Gencos were still limited subsidiaries of EVN.”
Genco 3 has a capacity of 4,445 megawatts per year. In 2013 the firm earned consolidated net profit of VND238 billion ($13.4 million) and consolidated revenue of VND19.056 trillion ($903 million).
The Vietnamese government has been preparing for the creation of a competitive power generation market since 2005. In early 2014 Deputy Prime Minister Hoang Trung Hai asked EVN to pick one Genco with relatively stable operations to equitise within the 2014-2015 period. PetroVietnam Power Corporation (PV Power) and Vinacomin Power Holding Corporation Limited have also been asked to develop their own equitisation plans.
vir
