Shares of the Saigon Beer, Alcohol and Beverage Corporation, Sabeco, Viet Nam’s biggest brewer, will be offered at an initial price of VND320,000 (US$14) each on December 18, it was announced on Wednesday.

A majority of the State-owned company’s shares, coded SAB on the HCM Stock Exchange (HOSE), will be on sale, the Ministry of Industry and Trade (MoIT) said.

Revealing details of the long-awaited sale, the ministry said 343.6 million shares with a par value of VND3.4 trillion, equivalent to 53.59 per cent of Sabeco’s charter capital, will be offered to investors.

The sale, aimed to significantly reduce the State’s holding in Sabeco from nearly 90 per cent, will be offered via open competitive bidding to eligible investors, in accordance with relevant regulations.

The sale is set to attract great attention from both domestic and foreign investors, given the company’s leading position in the industry.

The divestment will be made on the principles of transparency and ensuring highest benefit to the State based on market prices, securing foreign ownership in accordance with law, the ministry said.

It will also propose solutions to preserve and develop the Vietnamese beer’s brand name MoIT said.

Truong Thanh Hoai, deputy director of the ministry’s Heavy Industry Department, said the starting price of Sabeco shares was set out based on three criteria.

First, the average reference price of SAB during 30 latest trading sessions, before November 28, when details about the divestment plan published, was VND281,500 per share.

Second, the highest price forecast by consultants was VND184,700 per share.

Third, the closing price of SAB at the last transaction session on November 28 was VND320,000 per share.

He said the initial price of VND320,000 per share was selected as it was the highest among the short-listed figures. The selection was also made under relevant regulations for the sale set by the ministry.

Hoai said foreign investors will be allowed to buy up to 247.4 million shares, or 38.59 per cent stake in Sabeco. They own 10.41 per cent stake currently and foreign ownership is limited to a maximum of 49 per cent.

Interested foreign buyers can deposit funds in foreign currency or make a purchase through a financial guarantor, he said.

The State’s divestment from Sabeco was accelerated after the Ministry of Industry and Trade asked the HoSE to organise roadshows in Singapore and the UK.

The roadshow in Singapore was organised on November 24 and the one in UK on November 27.

Within the framework of the roadshows, Sabeco representatives provided general information about the corporation, its manufacturing system, subsidiaries, distribution network, its financial potential (through the financial reports from the past three years), as well as its post-equitisation development plans.

The divestment from Sabeco has drawn great interest from investors, especially foreign buyers. Several foreign breweries have admitted to an interest in Sabeco, including San Miguel, Heineken, SABMiller, Thai Beverage Public Company Limited (Thai Beverage), Japanese Asahi Group Holdings Ltd., and Kirin Holdings Co.

“Sabeco, valued at $9 billion at current prices, has received a strong response from potential suitors at an investors’ roadshow in Singapore and London.

“However, the maximum foreign ownership ratio of 49 per cent is also an obstacle to foreign investors,” said Deputy Minister Cao Quoc Hung.

Sabeco currently owns 24 manufacturing plants with a total designed capacity of 1.8 billion litres per year, 20 of which are in operation. The remaining four are expected to begin operations in the near future.

The company holds about 41 per cent of the nation’s $6.5 billion beer market. Viet Nam is among the top three beer consumers in Asia.

The Sabeco sale is part of a wider divestment programme being carried out by the Vietnamese government. — VNS