Previously, Petrolimex had submitted a similar petition to the government, however, Deputy Prime Minister Vuong Dinh Hue instructed the firm to temporarily maintain the foreign ownership limit at Petrolimex at less than 20%. 

Foreign holding in the firm now stands at 10.9%, leaving the remaining room for foreign investors at some 9%, equivalent to 116 million shares. 

“Following consultations with leading international and domestic financial advisory companies (CitiBank, BNP Paribas, Saigon Securities Incorporation, among others) and based on the actual circumstance, the group understands that to achieve the target of divesting state capital to under 51%, the current rate of 9% is hardly an attractive target for foreign investors,” stated the representatives of state capital at Petrolimex. 

According to the approved equitization scheme, in order for Petrolimex to have sufficient capital investing in strategic development projects in the next five years, along with divesting state capital to under 51%, total shares on offer should be around 509.2 million units. 

Assuming that the market price of Petrolimex’s share is VND60,000 (US$2.58) apiece, the said amount would cost at least VND30.5 trillion (US$1.3 billion).

“The capital needed to purchase the entire share amount would be significant, and foreign capital will play a critical role,” the group added. 

Petrolimex pointed to the fact that the government has opened door to foreign investors participating in petroleum market both directly and indirectly, with the aim of enhancing competitiveness and efficiency of domestic petroleum companies. 

Evidently, the foreign-wholly owned company Idemitsu Q8 received the government license to import and sell petroleum products wholesale and retail in the Vietnamese market, while a number of foreign investors have purchased shares in local petroleum companies such as Petrolimex, Comeco, Timexco, among others. 

Recently, the government approved the equitization scheme for PetroVietnam Oil (PV Oil), a subsidiary of Vietnam National Oil and Gas Group (PetroVietnam), in which foreign investors are allowed to purchase stake at the company with the maximum of 49%. 

Moreover, Petrolimex also proposed to postpone the equitization process until the 2019 – 2020 period, citing unfavorable market conditions in 2018 as reason. 

In the first six months of 2018, Petrolimex’s revenue stood at VND96.75 trillion (US$4.16 billion), up 30.5% year-on-year, while the group’s pre-tax profit reached VND2.8 trillion (US$120.47 million), equivalent to 56% of the year’s target and 113% year-on-year.