VNA to complete negotiations with investor this year
VNA to complete negotiations with investor this year
The national carrier, Vietnam Airlines (VNA), plans to complete its final negotiations with a potential strategic investor this month, General Director Pham Ngoc Minh told a conference on December 9.
The conference on reviewing five years of business renovation was held by the Ministry of Transport.
Minh said the strategic investor was foreign, but he did not directly identify it.
He also said the strategic investor had business potential, ensuring supportive conditions for VNA in creating a business plan and maximising the firm's future interests.
During the negotiation process, Minh shared that the two sides had difficulty negotiating the differences in policies and regulations between the two countries. Therefore, all the pertinent information had to be provided, in addition to the permanent agency VNA had provided the potential investor to offer support and consultations during the process.
"There is no concrete regulation on equitising airlines in Viet Nam, so the initial difficulties are inevitable. We are still in negotiations and expect to finish by the end of this month or early next year," Minh said.
The results of the negotiations will be submitted to the transport ministry and the prime minister. The agreement between VNA and the strategic investor is expected to be signed in the first quarter of next year, Minh said.
Earlier, at a meeting between Deputy Minister of Transport Nguyen Nhat and VNA's officials, Chairman Pham Viet Thanh confirmed that an investor from Japan had expressed interest in and wanted to negotiate becoming a VNA strategic investor.
A name that has often come up in talks about this position is All Nippon Airways (ANA). This airline is the second largest in Japan. In 2014, the firm successfully bought 49 per cent of Myanmar's Asian Wings Airways, worth US$25 million, targeting the development of an international network, instead of operating exclusively in the domestic market.
In Viet Nam, ANA opened a route from HCM City to Narita in 2001 and recently launched a route from Ha Noi to Haneda, using the Boeing B787 Dreamliner.
By the end of September this year, VNA earned VND52.5 trillion (US$2.34 billion) in revenue, VND1.08 trillion ($48.1 million) higher than its target. Of this amount, the pretax profit was more than VND1.3 trillion ($57.9 million), an increase of VND674 billion ($30 million) compared with the whole of last year when the firm had yet to be equitised.
VNA launched its initial public offering in November 2014 at an average price of VND22,300 ($0.9)per share. Under the equitisation plan, the firm will continue to sell up to 20 per cent of its stake for its strategic investor. The price has not yet been announced. It is expected to earn nearly VND6.3 trillion ($280 million) from the share issuance, which will be used to invest in aircraft.
