Cash-starved PVX divests from affiliate

Cash-starved PVX divests from affiliate

PetroVietnam Construction Co (PVX) has sold its entire 34-per-cent stake in PetroVietnam Premier Recreation Co (PVR) to the financial conglomerate Ocean Group (OGC) and VNT Co Ltd, an Ocean Group affiliate.

The move was part of PVX's strategy to divest from non-core lines of business while improving its financial picture, PVX said in announcing the share sale. PVR predominately operates in petroleum distribution, tourism and real estate development.

Under the terms of the deal, OGC bought 10 million PVR shares and VNT bought 8.15 million. The shares were sold at their par value of VND10,000 per share. On the day of the transaction, however, PVR shares were trading at just VND3,300 per share.

The deal therefore adds more than VND180 billion ($8.5 million) to the available capital of PetroVietnam's construction affiliate, helping ease PVX's heavy debt burden, which topped VND6.5 trillion ($309.5 million) by September 30. PVX's accrued losses by that date represented another VND546 billion ($26 million).

While VNT would not comment on the deal, an OGC official, on condition of anonymity, told the website vnexpress.net that OGC would soon join in the efforts to restructure PVR, noting its own strengths in the financial and real estate sectors. For its part, VNT is closely involved with OGC, co-operating with the group in a $365 billion housing project and holding 6.27 million OGC shares.

OGC posted a profit of VND121.25 billion ($5.7 million) in the first nine months of this year. VNT has yet to release current-year financials but published a net profit last year of over VND10.2 billion ($485,700).

vietnamnews