Vissan IPO attracts 142 investors

Saturday, Mar 05, 2016 09:00

A Vissan worker checking pork. The company's IPO will be held on March 7. — VNA/VNS Photo Thanh Vu

HA NOI (Biz Hub) — More than 140 investors from local and overseas markets will participate in the initial public offering (IPO) of the Viet Nam Meat Industries Limited Company (Vissan) on March 7.

Vissan will sell more than 11.3 million shares at the IPO, with a starting price of VND17,000 each. The company expects to earn at least VND192 billion (US$8.5 million) from the IPO.

The 142 investors comprise 123 local individuals, six local companies, six foreign individuals, and seven foreign firms. They have registered to buy 63.6 million shares at the IPO, more than five times the number of shares offered by Vissan.

The number of shares being offered at the IPO is equal to 14 per cent of the company's capital after privatisation, which is expected to reach VND809 billion.

Vissan will sell the shares to only three investors at the coming IPO, so that they become the company's strategic investors.

According to Vissan, a strategic investor should have equity of VND1 trillion as of the end of 2015, should not have suffered any losses during the 2012-14 period, and should not have suffered any accumulated loss as of the end of September 2015.

A strategic investor should also have had at least five years of operations experience, working in the same industries as Vissan, and be capable of working with Vissan to create a food chain called 3F (Feed-Farm-Food) to provide safe food to consumers.

Investor concerns

Vissan's Director General, Van Duc Muoi, has said that investors may not be happy because the State may remain the major shareholder with an ownership of 65 per cent of the company after privatisation is complete.

The State is to remain the major shareholder of Vissan in the near future because the company has a very important role in HCM City in stabilising the food market, especially the sectors of fresh meat and processed food.

Organisation investors have raised concerns that they will face strong competition from two big companies, including the local food and beverage producer Masan Group and the South Korea-based CJ Corporation.

Investors are also concerned that it will be difficult for them to express their strategic role, since Vissan offers a very small number of shares reflecting a small percentage of the company's capital. Plus, the company has not provided a detailed plan for future privatisation.

Muoi, Vissan's general director, has said that investors will have opportunities to increase their financial investments in the company as the State's ownership in Vissan will be reduced to below 51 per cent soon.

Local media reported that early in 2015, the privatisation of Vissan drew the attention of the South Korea-based CJ Corporation, which operates in multiple industries, including food and food services, pharmaceuticals and biotechnology, entertainment and media, and home shopping and logistics.

CJ Corporation plans to improve Vissan's brand, not only in the domestic market but also abroad, if it becomes one of Vissan's three strategic investors.

Vissan is now one of Viet Nam's leading corporations in the production of food, fresh meat, frozen meat, and meat products. Vissan was founded in 1970 as a subsidiary of the State-owned Sai Gon Trading Corporation (SATRA). — VNS

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