Only 3 per cent of a total of 267 million shares offered in the initial public offering (IPO) of Power Generation Corporation 3 (Genco 3) on Friday were sold successfully, a poor result given the high market expectations before the sale.

Genco 3 put up over 267 million shares, equivalent to nearly 12.84 per cent of its charter capital, for sale in the IPO on the HCM Stock Exchange but only 7.45 million shares, or 3 per cent of the total shares, were purchased.

About 336 investors, including 16 foreigners (14 individuals and two institutions), took part in the IPO.

At the average winning price of VND24,802 (US$1.09) per share, slightly higher than the minimum bidding price of VND24,600 a share, Genco 3 collected VND184.8 billion from the share sale.

Nguyen Van Le, chairman of Genco 3, attributed the poor result to the bad timing of the IPO, when the stock market experienced high volatility and investors increased profit-taking activity ahead of Tet (Lunar New Year) holiday.

Besides, investment in the power sector is usually medium- and long-term and not suitable for short-term investors, according to Le.

Power is a key sector for the socio-economic development of the whole country so the Government is taking prudent and proper steps in the process of equitisation of power enterprises.

According to Genco 3’s privatisation roadmap, the State will retain 51 per cent of stakes in Genco 3 after the IPO while only 12.84 per cent were offered to the public. About 36 per cent will be offered to the strategic investors.

Le said the share sale to strategic investors will be completed in the 2018-19 period. So far, four foreign investors from India, Thailand, South Korea and Middle East registered to become its strategic investors.

However, he also said foreign investors said the sale would be conducted in a short time and they did not have enough time to conduct due diligence for such a big investment.

Genco 3, with a charter capital of VND20.8 trillion, is one of the three power generation corporations under Electricity of Viet Nam (EVN)’s management which currently holds 51 per cent of its capital.

EVN will divest its capital at Genco 3 to less than controlling level after 2019 if the corporation were successful in restructuring its debts. In 2017, it reported total revenues of VND34.63 trillion.

Prior to Genco 3’s IPO, three other big power companies, including Binh Son Refining and Petrochemical Co, PV Power Corporation and PV Oil all successfully sold all the stakes offered at their IPOs in January. — VNS