How did Vietnam Airlines find its strategic investors?

Last update: 08:00 | 15/02/2017

VietNamNet Bridge - Vietnam Airlines (VNA) initially selected 19 investors as possible strategic investors, with 17 turning away, two showing interest, and one staying. 


VNA, the national flag air carrier, has for the first time revealed how it found the strategic shareholder – ANA Holdings, which bought 8.8 percent out of a 20 percent stake offered to strategic shareholders some months ago.

Of 19 potential investors shortlisted by VNA, 17 showed indifference and only two were interested. Finally, only one was chosen and it took it two years to fulfill necessary procedures to officially become the strategic shareholder of VNA, which holds the largest aviation market share in Vietnam.

The details of the process were shown in documents delivered at the 2017 extraordinary shareholders’ meeting. 

VNA began looking for strategic investors in September 2014. However, only some steps of the process built up by Morgan Stanley and Citigroup – the consultants - could be completed by April 1, 2015, when it shifted to operate as a joint stock company

In the market exploration round, Vietnam Airlines sent teasers and information security agreements to 19 investors, including 14 air carriers and five financial institutions. Two of them, Japan Airlines (JAL) and ANA Holdings Inc (ANA), showed their interest in the offer.

Vietnam Airlines (VNA) initially selected 19 investors as possible strategic investors, with 17 turning away, two showing interest, and one staying. 
During that time, VNA opened its IPO (initial public offering) on November 14, 2014. Forty nine million shares put into auctions were sold out at the price of VND22,300 per share on average. Vietcombank and Techcombank, two large banks, acquired 99 percent of the stakes offered.

Though the VNA’s share auction was bustling with two institutions and 1,578 individual investors, JAL in January 2015 showed its intention not to continue keeping interest in the deal and stopped the survey.

ANA completed the survey in March 2015.

In March 2015, VNA convened the first shareholders’ meeting. The meeting approved the plan to sell shares and use the money to be collected from selling stakes to strategic investors.

Only by July 2016, had VNA finished the remaining steps of the process of looking for strategic shareholders. It finally chose ANA Holdings from Japan as the strategic investor.

Analysts noted that VNA failed to sell shares at prices higher than the IPO price in November 2014.

In November 2014, VNA could sell 49 million shares at VND22,300 per share on average. In July 2016, it sold 107.66 million, or 8.77 percent of capital at VND21,000 per share. As such ANA Holdings spent VND2.261 trillion to acquire the shares.

ANA’s decision was seen as a wise move. It only had to pay VND21,000 for every Vietnam Airlines share, while the shares now have the market price of nearly VND40,000 per share.

Kim Chi

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