Why does an Oman investor want to buy Hai Phong Port?
Why does an Oman investor want to buy Hai Phong Port?
Analysts believe that there are many ways to develop Hai Phong Port and make big profits off it.
In late November 2014, the managers of SGRF, Oman’s State General Reserve Fund, and VOI, one of its subsidiaries, had a meeting with leaders of the Vietnam’s Ministry of Transport in Hanoi.
The topic discussed was an Oman investor’s plan to buy Hai Phong Port.
VOI is a joint venture between SGRF and the Vietnam’s State Capital Investment Corporation (SCIC), a powerful company specializing in making investments in businesses with the state’s money.
VOI has invested in several large projects in Vietnam, including the Vinh Son – Song Hinh thermopower plant, HCM City-based Technical Infrastructure Investment JSC and Vinmec Hospital.
Just two days after the meeting, the Ministry of Transport sent a document to the Prime Minister, asking to allow Vinalines (the owner of Hai Phong Port) to sell 19.68-29.68 percent of Hai Phong’s shares to VOI to reduce the Vinalines’ ownership ratio at the port from 94.68 percent to 51 percent.
On January 6, 2015, the government officially gave the nod to the proposal, paving the way for Vinalines and VOI to go ahead with the negotiations about the deal.
It was a surprise to many people that the Oman investor wants to buy the port, which has not generated interest from other investors.
Hai Phong Port twice failed to sell its shares, even though the average bidding price was VND13,507 per share, which was even lower than the shares of some listed smaller ports.
At the initial public offering (IPO) in May 2014, only 5.32 percent of shares offered were sold.
The Hai Phong has also reportedly fallen into a deadlock as it still cannot find strategic shareholders.
Why Hai Phong port?
Investors have not bought the port’s shares because they were told that the State would still hold 75 percent of the shares, while they wanted more.
After the government agreed to reduce the state’s ownership ratio at ports to a maximum of 51 percent, more investors expressed interest in the port.
VietinBank, one of the biggest creditors of Vinalines, decided to convert the loans it gave to Vinalines to the bank’s capital contribution to Hai Phong Port.
Hai Phong is believed to be a goose that can lay golden eggs, even when the deep-water port of Lach Huyen becomes operational in the future by 2018.
It is similar to small ports in HCM City, which still prosper despite the appearance of Cai Mep – Thi Vai ports.
